Fortunately, filing for bankruptcy offers debt relief to help you get your finances back in order, but you’ll need to avoid certain pitfalls when filing, such as overspending or accumulating more debt.

Here’s what you need to know about getting through the holidays during bankruptcy. 

Don’t Accumulate Any More Debt

If you’re already in the middle of filing for bankruptcy, any new debt that you accumulate will not be discharged. This includes credit card debt, so try to avoid racking up a substantial balance this season.

Those who are about to file for bankruptcy should also avoid accumulating substantial debt. Many debtors make the mistake of racking up more debt before filing because they figure that they’ll be able to discharge it. This is even more common during the holiday season because people spend a great deal on travel plans, gifts, and food. 

When you have a sudden increase in debt leading up to filing for bankruptcy, credit card companies may object to your bankruptcy discharge. They may even argue that you committed bankruptcy fraud, which is a federal felony. Those found guilty of bankruptcy fraud could face up to a five-year prison sentence and up to a $250,000 fine. 

Don’t Purchase Expensive Luxury Items

Although some holiday expenses are unavoidable, you should definitely avoid spending over $600 on a single luxury purchase. An item may be considered a “luxury” if it’s a product or service that’s not necessary to support you or your dependents. If you’re not sure whether some of your purchases are considered “luxury,” consult with a Chapter 7 or Chapter 13 bankruptcy attorney. 

If you make a luxury purchase of over $600 within 90 days of filing for bankruptcy, creditors will request for the bankruptcy court to not discharge the debt. This also includes gifts, so it’s critical not to spend over $600 on any one gift.

Some debtors attempt to avoid the luxury item bankruptcy provision by taking a cash advance on their credit card, but this will also likely not work. If you take a cash advance of over $950 within 70 days of filing for bankruptcy, the credit card company will argue against your debt being discharged. 

How to Cut Down on Spending This Holiday Season

It’s best to avoid accumulating more debt during the holidays, and you can do this by creating a tight budget and by staying clear of any holiday sales that may increase your spending. 

When creating your budget, calculate how much you can reasonably spend without falling into further debt. Then, create a list of necessary holiday expenses. It’s critically important to avoid going over budget this holiday season as you prepare to file for bankruptcy or continue going through the filing process.

You can also find creative ways to reduce your spending, such as introducing a Secret Santa gift exchange in your family. That way, you’re not having to purchase a gift for every member of your family. 

Additionally, if you’re hosting extended family or friends for the holidays, you can introduce a potluck system so that you don’t need to spend as much on food. 

Bankruptcy Automatic Stay

Although you need to tighten your belt and avoid more debt this holiday season, filing for bankruptcy does provide certain protections and benefits that may alleviate some of your financial stress, such as an automatic stay. 

When filing for Chapter 13 bankruptcy, your home’s mortgage payments will be restructured into your repayment plan, and creditors will not be able to repossess your home or take legal action against you thanks to the bankruptcy automatic stay. 

With Chapter 7 bankruptcy, you reaffirm your secured debts while discharging unsecured debts. Secured debts refer to debts with collateral, such as a home or car. Most of the time, Chapter 7 filers are able to reaffirm their mortgages as long as they are not behind on payments. 

If you are behind on a house or car payment, you may want to consider filing for Chapter 13 bankruptcy. 

Contact an Indiana Bankruptcy Attorney

If you need help getting started with filing bankruptcy this holiday season, consider enlisting the services of Chapter 13 or Chapter 7 bankruptcy lawyers. Qualified bankruptcy attorneys can help you improve your financial situation and can assist you if you’re the victim of creditor harassment. 
For seasoned bankruptcy attorneys in Indiana, contact Sawin & Shea, LLC. We have years of experience helping Indiana residents become debt free. Call us today at 317-759-1483, or you can schedule a FREE consultation online here.

The post How to Survive the Holidays During Bankruptcy appeared first on Indianapolis Bankruptcy Attorneys of Sawin & Shea.

Let’s begin by discussing the ramifications of bankruptcy on your current employment. Your co-workers have no reason to ever know that you have filed for bankruptcy unless you tell them. It’s not like that scene from The Office where Michael Scott shouts across the bullpen, “I…DECLARE…BANKRUPTCY!!!!” 

In some cases, your employer may not know about your bankruptcy proceedings, but in other cases, they will have to know.

• For example, if you have been having your wages garnished to pay back a persistent creditor, your employer would be aware that this is no longer necessary since you are in the process of Chapter 7 or Chapter 13 bankruptcy. 
• In rare cases, your repayment plan in Chapter 13 bankruptcy may require your wages to be garnished. 

However, rather than causing your employer to cast aspersions on you, bankruptcy may have the opposite effect. The fact that you have taken control of your debts and are making positive steps to either have them discharged or reorganize them is something that should garner your employer’s respect. Additionally, you may find yourself more focused on your job once an automatic stay has removed the prospect of constant harassing phone calls and letters from creditors.

If you are concerned that you will lose your job, don’t be. This is not allowed. You are legally protected from employment discrimination under the U.S. Bankruptcy Code.

If it is solely because of your bankruptcy, your employer is not allowed to:

• Terminate you
• Otherwise discriminate against you (such as by demotion)

Can I be denied employment because of bankruptcy?

• Regarding bankruptcy and getting a job, If you are applying for government positions, the law is clear: you cannot be denied employment solely because of your bankruptcy. 
• This isn’t necessarily the case with private companies. It will certainly be difficult to obtain employment where budgeting, accounting, or payroll is a major part of the job description, but if you are qualified for your position and acceptable in every other way, your bankruptcy shouldn’t be a disqualifier for most situations. 
• We recommend you mention your bankruptcy yourself, rather than waiting until you are asked about it after a credit check. This way, you can control the narrative. Student loans, crushing medical debts, credit card debts – none of these lessen your worth as an individual or as an employee.

Will my bankruptcy show up on a pre-employment check?

Yes, if the company runs a credit report. Chapter 7 bankruptcies remain on your credit report for 10 years and Chapter 13 bankruptcies remain for 7 years. You can read about this in detail in our article, How Long Does a Bankruptcy Stay on Your Credit Report? Generally, companies don’t take the time and trouble to do a pre employment check for bankruptcy unless it is the final step in hiring you. This is good news; it means that they already consider you to be a strong candidate.

Your bankruptcy will not show up on a criminal background check because you are not a criminal. Bankruptcy is not against the law. 

As we mentioned above, government agencies (federal, state, or local) cannot deny you employment simply because your bankruptcy appears on your credit report. 

As bankruptcy attorneys, we work with you through the entire bankruptcy process, including after your debts are discharged in Chapter 7 bankruptcy, or after your Chapter 13 bankruptcy period. We will check to make sure that your credit report is correct and that no creditors are continuing to report negatively or show a debt as not being discharged. 

Sawin & Shea Is Here to Help

No bankruptcy situation is completely straightforward, so don’t try to maneuver the intricacies of Indiana’s bankruptcy codes on your own. At Sawin & Shea, LLC, we understand that hiring an attorney to help you file bankruptcy is scary. We are committed to providing compassionate and non-judgmental representation to all of our clients. Our attorneys have helped thousands of people just like you get the fresh start they deserve. We are here to help understand how does bankruptcy affect your job and future credit.  

Speak to an attorney today at (317) 759-1483. Or contact us online. 

The post How Does Bankruptcy Affect Your Job and Future Credit?  appeared first on Indianapolis Bankruptcy Attorneys of Sawin & Shea.

One common question that filers have regarding the Chapter 13 process involves income increases and whether they affect payment plans. An increase in income will likely impact your Chapter 13 repayment plan, and you are obligated to report wage increases to your bankruptcy trustee. 

If you have further questions regarding filing for Chapter 13 bankruptcy, your best course of action may be to enlist the assistance of Chapter 13 bankruptcy lawyers. Seasoned bankruptcy lawyers can untangle the complex intricacies of filing, and they can help you create a financial plan for becoming debt free. For experienced Chapter 13 bankruptcy attorneys in Indiana, contact the offices of Sawin & Shea, LLC. 

What If My Income Increases During Chapter 13 Bankruptcy?

When filing Chapter 13 bankruptcy, it’s important to note that the court determines your repayment plan based on your income minus any necessary daily-living expenses, such as food, rent, utilities, health care, and transportation. If you receive a pay increase and your cost of living remains the same, you’ll likely need to pay more on your repayment plan, but that’s not always the case. 

The specific language of your repayment plan can impact whether or not you’ll need to pay more after receiving a bump in income, and if your increase in income isn’t significant, you might not be obligated to make larger payments. 

Regardless of the amount of your Chapter 13 income increase, you need to report it to your bankruptcy trustee. Whether or not your payments increase will depend on your updated income compared to your expenses, so if your cost of living increases with your new income — for example, if you have to relocate to a more expensive part of the country for a new job — you might not need to make additional payments. 

Additionally, if your Chapter 13 plan pays back all of your unsecured creditors, the court will likely not require you to make increased payments. If you decide to make greater payments in this scenario, you’ll complete the bankruptcy process faster. 

What If I Receive a Bonus During the Chapter 13 Process?

You must report your bonuses to your bankruptcy trustee. If the bonus amount is insignificant, you’ll likely be able to keep it, but a substantial bonus will affect your repayment plan. 

If you typically receive yearly or quarterly bonuses, you need to report them to your bankruptcy trustee when beginning the Chapter 13 process. Your bonuses will impact your Chapter 13 payment plan. 

Can I Keep the Money From My Side Hustle?

The Chapter 13 payment plan takes all of your finances into account and not just the wages from your primary job. If you have a side business or another source of income, you must report your earnings to your bankruptcy trustee. 

What If My Spouse Receives an Income Increase?

When determining your Chapter 13 payment plan, your bankruptcy trustee evaluates your household’s disposable income. This means that your spouse’s wage increases, side hustles, and bonuses directly affect your Chapter 13 payment plan. 

Fortunately, you can use your spouse’s expenses to reduce the amount of disposable income. For example, you can deduct what both you AND your spouse spend on food, utilities, housing, etc. Additionally, your spouse’s debts do not impact your payment plan unless they’re filing with you. 

Will the Chapter 13 Bankruptcy Trustee Check My Income?

A Chapter 13 bankruptcy trustee will usually not closely monitor a person’s income during the bankruptcy process, but they have every right to request proof of your income and pay stubs. It’s not their responsibility to scrutinize your finances for any wage increases, so you need to report changes in your income. 

If you fail to report an income increase to your bankruptcy trustee, you can lose the right to discharge your debts, and the court may dismiss your bankruptcy case. 

Additionally, you may even face federal charges for consciously failing to report an income increase during Chapter 13 bankruptcy. You could face bankruptcy fraud charges, which come with a penalty of up to $250,000 and five years in prison.  

Reporting a Change in Income

Fortunately, reporting a Chapter 13 income increase is a simple process. All you need to do is contact your bankruptcy trustee and inform them of the increase. 

Before reporting the increase, you can also consult with a bankruptcy attorney. Bankruptcy attorneys specialize in assisting debtors with their finances and the filing process. They may be able to give you options that reduce the amount you’ll need to pay in the updated payment plan. 

Contact an Indiana Chapter 13 Bankruptcy Attorney

If you’re looking for experienced Chapter 13 bankruptcy lawyers in Indianapolis, contact Sawin & Shea, LLC. We’ve helped numerous Indiana residents become debt-free through filing assistance and financial planning, and we also help our clients by stopping creditor harassment. To answer the question, “What if my income increases during Chapter 13?” and any other bankruptcy questions, call us today at 317-759-1483, or you can click here to schedule a FREE consultation. 

The post What If My Income Increases During Chapter 13? appeared first on Indianapolis Bankruptcy Attorneys of Sawin & Shea.

If you’re considering filing Chapter 7 or Chapter 13 bankruptcy, consider enlisting the help of skilled bankruptcy attorneys. They can assist you through the bankruptcy process and can keep creditors from unlawfully harassing you.  

In order to understand the bankruptcy process, here’s what you need to know about consumer debt and non-consumer debt. 

What is Consumer Debt?

Consumer debt refers to an individual, family, or household’s debts incurred through personal spending and expenses. Some examples of consumer debt include:

• Personal credit card debt
• Store financing
• Home mortgages
• Rental furniture
• Personal lines of credit and bank loans
• Vehicle leases, which can include cars, planes, boats, and more
• Cosmetic-based medical debt
• Family or personal legal fees

If your debts have to do with personal or family spending rather than business expenses, penalties, and taxes, they are likely consumer debts. 

What is Non-Consumer Debt?

Non-consumer debts include business spending and expenses, as well as different taxes and penalties. Examples of non consumer debts include:

• Alimony
• Child support 
• Traffic tickets
• Parking tickets
• Criminal restitution
• Business loans
• Personal guarantees
• Business property mortgages
• Business-related legal fees
• Taxes

Are Student Loans Consumer or Non-Consumer Debts? 

You may have noticed that we didn’t list student loans in the consumer and non-consumer categories. The reason for this is because the student loan debt classification depends on multiple factors, including whether the loans were primarily spent on tuition, which would likely fall under non-consumer, or for daily expenses and rent, which a court would likely consider consumer debt. 

Because the interpretation of whether student debt is consumer or non-consumer is somewhat subjective at times, it’s helpful to have a bankruptcy attorney at your side who can assist you with proving a classification in court. 

How Does Consumer and Non-Consumer Debt Impact Your Bankruptcy Chapter 13 Filing?

When it comes to filing Chapter 13, your consumer and non-consumer debt classifications determine what is and isn’t protected by an automatic stay. 

An automatic stay prevents creditors and lenders from collecting debt or collateral on protected assets. With consumer debts, co-debtors receive the protection of an automatic stay. 

For example, if you co-own a house with someone filing Chapter 13 bankruptcy and the house is your primary residence, the automatic stay will protect you from a home foreclosure because it’s considered consumer debt. 

If you’re a co-signer or co-debtor on a business property, such as a rental home, the automatic stay doesn’t protect you from lenders, so they can repossess the property. 

How Does Consumer and Non-Consumer Debt Impact Your Chapter 7 Bankruptcy Filing?

Some people are required to undergo a bankruptcy means test before filing for Chapter 7 bankruptcy. This test calculates whether an individual can repay lenders and creditors without declaring Chapter 7 bankruptcy. 

Those who primarily have non-consumer debts rather than consumer debts do not need to take the bankruptcy means test.

What Does “Primarily” Consumer Debt Mean?

Only those with over 50% of consumer debts need to take the bankruptcy means test, so if your debt is primarily consumer, you’ll need to take the means test.

Although those with more consumer debt need to take the bankruptcy means test, that doesn’t mean they won’t qualify for consumer debt relief through Chapter 7 bankruptcy. 

The means test that determines your ability to file bankruptcy contains two parts. The first part evaluates whether the person wanting to file has a monthly income that’s greater than the median income for their state. If their monthly income is lower, they qualify for Chapter 7 bankruptcy.

In the event their income is greater than the state median, they must undergo a more rigorous evaluation. The next part of the test involves comparing a person’s income with their expenses. If the potential bankruptcy filer reduces their monthly income by their expenses — such as food, out-of-pocket health care, housing, utilities, transportation, and other essentials — and they multiply the monthly difference between their income and expenses by 60, the amount determines whether they qualify for Chapter 7 or Chapter 13:

• If the amount is $12,850,000 or more, the person must file through Chapter 13 rather than Chapter 7.
• If the amount is over 25% of the unsecured debt, the person qualifies for Chapter 13.
• If the amount is 25% or less than the person’s unsecured debts, the person filing can choose either Chapter 7 or Chapter 13.
• If the amount is $7,700,000 or less, they can choose either Chapter 7 or Chapter 13.

Contact Indianapolis Bankruptcy Attorneys

Navigating the complex world of filing for Chapter 7 or Chapter 13 bankruptcy can be complicated, to say the least. If you’re considering filing, take the guesswork out of the process by contacting the Indiana bankruptcy lawyers at Sawin & Shea, LLC. 

Call us today at 317-759-1483, or you can request a FREE consultation with one of our bankruptcy attorneys by clicking here.  

The post Consumer Debt vs. Non Consumer Debt appeared first on Indianapolis Bankruptcy Attorneys of Sawin & Shea.

When filing for Chapter 7 or Chapter 13 bankruptcy, you’ll qualify for exemptions that allow you to keep some of your money and certain types of personal property. In this article, we discuss what exemptions you can expect and what you might lose when filing for bankruptcy. 

What Will I Lose When Filing for Bankruptcy?

The majority of those who file Chapter 7 bankruptcy do not lose any of their assets, but it’s possible to lose nonexempt assets and properties when filing. A nonexempt asset is something that can be sold by a trustee to pay creditors. 

Some assets that are nonexempt include:

• Property that is NOT your primary residence, such as a vacation home or rental property
• Family heirlooms
• Investments that aren’t in a retirement account
• Musical instruments 
• Artwork
• Designer handbags 
• Designer shoes
• Jewelry
• Expensive clothing
• New car or a car with a high resale value

Although the idea of losing these different assets may seem daunting, only about 5% of those filing for Chapter 7 bankruptcy lose any of their assets. The bankruptcy trustee assigned to your case cannot sell your possessions that do not have value, and they’re not allowed to sell items that you need in order to live or make a living, such as your primary residence or the car you take to work.  

What Is the Indiana Homestead Exemption?

The Indiana Homestead Exemption allows borrowers to protect up to $19,300 of equity in their residential property or tangible personal property that serves as a residence, such as a mobile home. Different types of properties can be considered a personal or family residence — such as a farm, condominium, or trailer — so as long as it’s your primary place of residence, you’ll likely have an exemption for your equity up to $19,300. 

Another important note is that you can also file bankruptcy jointly with a spouse to double your home’s exemption amount. Additionally, if only one spouse files for bankruptcy and has an interest in the property as a tenant by the entirety, the property may be exempt. 

Indiana Wildcard Exemption

In addition to the Indiana Homestead Exemption, Indianans can also protect up to $10,250 worth of tangible personal property and $400 in intangible personal property with the Indiana wildcard exemption.

Unfortunately, Indiana does not offer a motor vehicle exemption when filing for bankruptcy, but you can protect your vehicle under the wildcard exemption. 

Other Indiana Bankruptcy Exemptions

Indiana also offers other important personal property and asset exemptions when filing. State law protects some forms of pensions and retirement benefits including:

• IRA accounts
• Pension accounts
• Retirement accounts
• Police pension funds
• Firefighter pension funds
• Public employees’ retirement plans
• Legislators’ benefit plans
• Indiana State Teachers’ Retirement fund benefits

In addition to these different types of accounts and plans, Indiana also protects the following types of insurance benefits:

• Life insurance policies naming an insured person’s spouse, children, dependent relatives, or creditors as long as there’s not a claim against the insured person’s benefits
• Fraternal society benefits, such as Thrivent and the American Fraternal Alliance

Other types of exempt personal property and assets include:

• Health aids
• Medical care savings accounts
• Health savings accounts
• Education savings accounts
• Spendthrift trusts
• Certain tuition programs 
• Earned income credit for an exempt property
• Interest in a refund for an exempt property
• Military equipment, arms, or uniforms
• Unemployment compensation benefits
• Certain partnership properties
• Workers’ compensation except for child support claims
• Lesser than 75% of earned unpaid wages or thirty times the Federal minimum wage

Contact an Indiana Chapter 7 or Chapter 13 Bankruptcy Lawyer

Filing for bankruptcy can be an incredibly stressful process, especially if you’re facing abusive creditors who harass or attempt to intimidate you. To ensure that you retain the most possessions and personal finances possible, you need a seasoned bankruptcy attorney at your side. They can also help you through the bankruptcy process by stopping creditors from illegally contacting you. 

For exceptional legal assistance in bankruptcy, contact the attorneys at Sawin & Shea, LLC. Our office provides both Indiana Chapter 7 bankruptcy attorneys as well as attorneys who specialize in handling Chapter 13 bankruptcy.

Call our office today at 317-759-1483, or you can schedule a free consultation with one of our skilled lawyers here. 

The post Will I Lose Everything If I File for Bankruptcy? appeared first on Indianapolis Bankruptcy Attorneys of Sawin & Shea.

Lack of necessary medical care

There are several ways that medical debt can affect your health, and many of them are the same ways that any financial insecurity can affect your health. For example, if you are in debt, you will be less apt to visit a doctor for problems with any chronic conditions – or even new medical conditions- you may suffer from. This can mean that diabetes, asthma, or high blood pressure issues go unchecked. It can also mean that necessary mental health precautions are left unaddressed. 

Inexpensive, “empty calorie” foods

Having debts can prevent people from meeting other basic needs as well. This is evident in food buying choices. On average, healthy foods cost three times as much per calorie as unhealthy options. Unfortunately, if you are weighed under by medical debt, it may be easier to buy less expensive foods with empty calories. These foods tend to have high amounts of sugar, saturated fat, and sodium, all of which can lead to obesity, high blood pressure, type 2 diabetes, and heart disease. Poor nutrition can adversely affect anyone’s health. 

Housing

Those with medical debt may also experience difficulties paying for safe housing or adequate utilities, such as heating and air conditioning. It has been documented that financial insecurity is linked to housing located far from green spaces that motivate people to exercise and provide recreational opportunities. One NIH study notes that “access to green spaces has been viewed as a principal key to enhancing health and well-being.” Lack of access to these green spaces can negatively affect your health.

Stress-driven behaviors

Another way that health behavior can be affected by medical debt is in unhealthy stress-driven behaviors. Many people smoke to relieve stress, but in fact, smoking causes stress-related illnesses. It causes increased blood pressure, elevated heart rates, constricted blood vessels, and a decrease in available oxygen. Even worse, 80% of lung cancers and lung cancer deaths are caused by smoking. Other harmful behaviors triggered by stress include alcohol or drug use, both of which negatively affect health. 

How Sawin & Shea, LLC can help

The Sycamore Institute concludes its report by saying that “A growing body of evidence connects medical debt with health outcomes” and reiterating the ”clear link between these factors and poorer health outcomes.” Obviously, medical debt can negatively affect your health. 

However, these negative impacts are not inevitable; you do have the option to take steps to either eliminate your medical debt or to make manageable payments towards it by filing for Chapter 7 or Chapter 13 bankruptcy.

Between 40% and 60% of bankruptcies are prompted by medical debt; this is a problem that is all too common. The ramifications of this kind of cycle of debt can be serious for your long-term financial health as well as your short and long-term physical and mental health. Filing for Chapter 7 bankruptcy can discharge (get rid of) medical debts as well as other unsecured debts as long as you have a low enough income to qualify for it. Chapter 13 bankruptcy can also be a road toward discharging your medical debts after you complete a 3-5 year payment plan. You can read about this in more detail in our blog, How Are Medical Bills Treated in Chapter 13 Bankruptcy?

At Sawin & Shea, LLC, we have over 75 years of bankruptcy experience helping thousands of people just like you get the fresh start they deserve. 

Speak to an attorney today at (317) 759-1483. Or contact us online. 

The post Study Shows Medical Debt Can Affect Your Health appeared first on Indianapolis Bankruptcy Attorneys of Sawin & Shea.

If you’re at risk of losing your home, Chapter 13 bankruptcy could be your best option. When you’re going through the process of filing Chapter 13, foreclosure cannot occur because you’re granted an automatic stay, meaning that lenders cannot pursue your debts and recover collateral, including your home.

If you’re considering filing for Chapter 13 bankruptcy, it’s important to know how it differs from Chapter 7, how long it can delay the foreclosure of your home, and what happens when you fail to fulfill your Chapter 13 repayment plan. 

Even with the helpful resources on our site and other sites, filing for bankruptcy can be incredibly confusing. We suggest contacting a Chapter 13 bankruptcy attorney today to untangle the complexities of filing and answer all of your Chapter 13 bankruptcy foreclosure questions. 

What Is Chapter 13 Bankruptcy?

You’ve likely heard about Chapter 7 and Chapter 13 bankruptcy — as they are the most common types and are available to individuals — but how do they differ? Chapter 7 bankruptcy liquidates your assets in order to discharge unsecured debts, such as medical bills and credit card debt. Although this may sound like you’ll lose everything, most filers do not lose any of their assets because of exemptions. If you’re eligible to file under Chapter 7 and only have unsecured debts, this may be your best course of action.

Unlike Chapter 7 bankruptcy, Chapter 13 packages your different forms of debt into a single repayment plan. When filing, the bankruptcy court assigns a trustee to observe the filer’s progress. The reason why this option is appealing is that it combines both unsecured and secured debts, such as a home loan, into a single repayment plan. 

A secured debt means that the borrower has collateral on the debt, such as a car lease. If you fail to make your payments, the lender can recover the collateral. 

If you are behind in vehicle or home payments, Chapter 13 bankruptcy will likely be a better option for you than Chapter 7. Although it won’t necessarily wipe out your mortgage debt, Chapter 13 can make the debt more manageable. Like with filing under Chapter 7, Chapter 13 discharges your unsecured debts upon completion, so you’ll likely have an easier time tackling the rest of your mortgage or car payments after filing. 

Can I Stop Foreclosure with Chapter 13 Bankruptcy?

If you’re wondering, “How long will Chapter 13 delay foreclosure?” you’re not alone. This is a common question we receive, and here’s the answer: 

As long as you don’t fall behind on your payments within your repayment plan, you can suspend your home’s foreclosure indefinitely. Filing for Chapter 13 bankruptcy puts an automatic stay on your home, so lenders must wait until courts remove the automatic stay or dismiss your case. 

One important note is that your lender can foreclose on your home after you complete the bankruptcy process. The Chapter 13 repayment plans should include your mortgage payments, but completing the payment plan doesn’t mean that you’ve paid back everything you owe on your home. 

Fortunately, with Chapter 13 foreclosure deferment, you might be able to continue paying your mortgage on an adjusted plan, but this falls outside the scope of filing for bankruptcy, so you’ll need to work that out with your lender.  

What If I Default On My Chapter 13 Payments?

You run the risk of losing your home if you fail to keep up with your repayment plan. Chapter 13 bankruptcy doesn’t discharge your mortgage debt, so anything that you don’t pay back within your repayment plan you’ll still owe if you default.  

If you fail to fulfill your repayment plan when filing for Chapter 13 bankruptcy, foreclosure on your home will likely occur. The lender will receive permission to foreclose on your home because the court will declare a default judgment against you. 

If you run the risk of defaulting on your repayment plan, you need to communicate with your court-appointed trustee. You may be able to defer payments or temporarily suspend them. 

Contact an Indiana Chapter 13 Bankruptcy Attorney 

Navigating the complex world of declaring bankruptcy is hard, but you don’t need to go through it alone. A seasoned bankruptcy attorney can represent you and assist in getting your financial situation back on track.
For Chapter 13 bankruptcy attorneys in Indianapolis, contact the attorneys at Sawin & Shea, LLC. We also serve the people of Avon, Brownsburg, Carmel, Greenwood, Fishers, Noblesville, Westfield, and Zionsville. So if you’re wondering how long will Chapter 13 delay foreclosure, or have any other bankruptcy questions, we have the answers. If you’re ready to get on the path to becoming debt free, call us at 317-759-1483, or you can schedule a FREE consultation here.

The post How Long Will Chapter 13 Delay Foreclosure? appeared first on Indianapolis Bankruptcy Attorneys of Sawin & Shea.

Keep in mind, however, that a no-asset bankruptcy does not mean the debtor automatically gets to keep all of their property. You will only be allowed a no asset bankruptcy if you have bankruptcy exempt assets that legally cannot be taken away. Nonexempt assets can still be used to pay creditors. 

This is important to understand because some debtors will try to hide their nonexempt assets to make it seem as though they are eligible for a no asset case, thus allowing them to keep their property. But hiding your assets can result in serious penalties that can worsen your situation. 

Ways Debtors Try to Hide Their Assets in Bankruptcy

So why would someone deliberately choose to hide their assets, and how would they do so? 

In most cases, debtors hide their assets out of fear of losing their property. Assets or properties that are considered nonexempt (properties that are not your primary residence or items that are expensive and not necessary for living) can be sold off, and the money can be used to help pay off creditors. 

While these types of assets are not needed to live, debtors can still have an attachment to them and fear losing them. Thus they may try to hide them when filing for bankruptcy. 

The ways a debtor might try to hide their assets include:

• Lying about having the asset in the first place and trying to hide or erase any proof that it exists. 
• Transferring or disposing assets before bankruptcy. For example, if someone owns an expensive second vehicle that they don’t want to lose, they may try to quickly transfer it into someone else’s name or make it seem as if they disposed of it or got rid of it. 
• Devaluing assets. Such as by creating a fake mortgage for a vacation home to make it seem as though it has little to no value to keep it from being used to pay off creditors

How Does a Bankruptcy Trustee Find Hidden Assets?

It is the bankruptcy trustee’s job to use assets to pay off creditors if there are any assets available. So even if a debtor claims to not have any assets, the trustee will still go looking to make sure that there are truly no assets available. Unfortunately, if a trustee finds an asset that was purposefully hidden, it can have serious consequences. 

In the digital age that we live in, it is much easier for a trustee to track down a hidden asset. They can do so by:

• Performing a public records search
• Doing an online asset search
• Reviewing the debtor’s purchase history
• Pulling payroll, bank, and tax return records
• Obtaining reports from a former spouse, coworker, or friend

Penalties for Hiding Assets in Bankruptcy

If your bankruptcy trustee finds out that you have purposefully hidden any of your assets, they will file a lawsuit with the bankruptcy court—otherwise known as an adversary proceeding. Once the court reviews your case, if they determine that you did intentionally hide your assets, you will be denied a discharge of your debt. 

Furthermore, you could also lose the ability to have those same debts discharged in any future bankruptcies. Some debtors can even be criminally charged with bankruptcy fraud as a result of hiding assets, which can result in up to a $250,000 fine and up to 20 years in prison. 

How Sawin & Shea, LLC Can Help

If you are filing for bankruptcy and need help understanding your rights where your assets are concerned, our team of bankruptcy attorneys can assist you. Understandably, losing an asset can be scary, but not all assets are non-exempt. Our team will help you understand the bankruptcy process to ensure you get to keep all of your exempt assets. 

At Sawin & Shea, we have helped many clients like yourself understand the complexities of bankruptcy and how to make the right decisions to achieve the best possible outcome. For a free consultation, call us at 317-759-1483 or send us an email today! 

The post The Dangers of Hiding Assets in a No Asset Bankruptcy appeared first on Indianapolis Bankruptcy Attorneys of Sawin & Shea.

Unfortunately, there is no one answer to this question, as it can vary on a case-by-case basis. But we’re here to walk you through it. Below, we’ll cover the various reasons why a person might want to convert to Chapter 7, the benefits of converting, who qualifies to convert, the cost involved, and how the process works. 

If you have any further questions and need help filing a Chapter 13 or Chapter 7 bankruptcy, don’t hesitate to reach out—the team at Sawin & Shea, LLC can assist you. 

For What Reasons Would Someone Convert From Chapter 13 to Chapter 7?

There are a few different reasons why a debtor might need or want to convert Chapter 13 to Chapter 7, including:

• Their Chapter 13 payment is too high, and they can no longer afford the payment plan.
• Their situation has changed, and they now qualify for Chapter 7.
• They are worried their Chapter 13 payment plan will take too long to complete.
• They are interested in surrendering a property that is protected and saved in Chapter 13.

What Are the Benefits of Converting a Chapter 13 Bankruptcy to a Chapter 7?

Understandably, when considering converting your Chapter 13 to a Chapter 7 bankruptcy, you will want to weigh your options and understand the benefits. And there are indeed benefits to switching your Chapter 13 to Chapter 7. 

1. The most significant advantage of converting is that a Chapter 7 bankruptcy can be completed more quickly than Chapter 13. A Chapter 7 bankruptcy can result in a discharge of your debts in as little as 120 days. In contrast, Chapter 13 requires you to follow a payment plan that can take 3 to 5 years before the rest of your debt is discharged. 

2. The second benefit is that Chapter 7 is often cheaper than Chapter 13. With a Chapter 7 bankruptcy, you do not have a payment plan, and your debts will often get discharged upfront. However, with Chapter 13, you must commit to a payment plan, which can cost you more money in the long run. 

It’s important to note, however, that while there are benefits to converting, there are also disadvantages. Though Chapter 13 requires you to commit to a payment plan, it does protect your property. So the downside of converting to Chapter 7 is that it leaves your property vulnerable. 

Chapter 7 is also more strict about what debts you can wipe out, so there is no guarantee that your debt will be eligible for a discharge. It is also much harder to qualify for a Chapter 7 bankruptcy. 

So make sure you weigh these pros and cons before trying to convert. In some cases, it might end up being better for you to stick to Chapter 13. A qualified and experienced bankruptcy attorney can help you make this decision. 

Do I Qualify to Convert My Chapter 13 to a Chapter 7?

When you are interested in converting a Chapter 13 bankruptcy to Chapter 7, you must first pass what is known as a means test to determine if you are eligible. This test looks at your disposable income to determine how much money you have and what you can afford. 

If it is determined that your income is too low for you to continue paying your Chapter 13 payments, you will likely qualify to convert to Chapter 7. In contrast, if your income is too high, you might not qualify.

However, not all bankruptcy courts agree on this process. Some courts do agree that the means test can be used when deciding if a debtor qualifies for conversion to Chapter 7, but some courts do not. So again, qualifying will ultimately be determined on a case-by-case basis and will depend on your jurisdiction. 

A local bankruptcy attorney will be familiar with the courts in your jurisdiction and can better help you determine whether or not you will qualify. 

How Much Does it Cost to Convert Chapter 13 to 7?

The general upfront cost to convert from Chapter 13 to Chapter 7 is not much. If you qualify, you will simply file a “notice of conversion” and will then be asked to pay a conversion fee. The fee for going from Chapter 13 to Chapter 7 is only $25, as this is the difference between the initial filing fee (Chapter 7 = $338 and Chapter 13 = $313). 

However, keep in mind that the final result of your bankruptcy could save you money or end up costing you more, which is why it’s important to weigh the pros and cons. Remember, Chapter 7 could be cheaper in the long run because it can wipe out your debt faster, but it does mean your property could be taken away, which can cost you. 

So ultimately, the total cost of your bankruptcy conversion will depend on your individual situation. But the upfront cost will only be $25 for the conversion fee. 

How to Convert Chapter 13 to 7

When you file for a conversion, you will first file your “notice of conversion” and pay the fee, then you will be assigned a new trustee, and you will also have to attend a 341 hearing (meeting of creditors). 

You will typically not be required to file a new bankruptcy petition, but there will still be other forms you have to complete. These documents include:

• Reaffirmation agreements
• Amended schedules
• Additional creditors
• Notice of intent

It’s also important to note that your property that was protected in your Chapter 13 bankruptcy will become unprotected and may be used to pay off your debts when you convert. Your new Chapter 7 trustee will potentially sell your property and distribute the proceeds to pay your creditors. This can include your home, your car, or other valuable possessions. 

How Sawin & Shea, LLC Can Help

While converting from Chapter 13 to Chapter 7 can be beneficial, it could also end up costing you more money in the long run. So before petitioning to convert, you should speak with a bankruptcy attorney who has experience handling these kinds of cases. They can answer all your questions and guide you through the best course of action. 

Contact Sawin & Shea at 317-759-1483 or send us an email for a free consultation today!

The post Can You Convert Chapter 13 to Chapter 7? appeared first on Indianapolis Bankruptcy Attorneys of Sawin & Shea.

To fully understand how this works, it helps to understand the basics of credit card debt when you are filing for bankruptcy, which we will dive into below. 

If you have further questions after reading this article or need help filing for your Chapter 7 bankruptcy or Chapter 13 bankruptcy, contact the Indianapolis bankruptcy attorneys at Sawin & Shea, LLC. 

Understanding Credit Card Debt and Bankruptcy

Most people file for bankruptcy in the hopes of having their debts that they are struggling to pay discharged. However, debt discharge for credit cards can work differently depending on the type of bankruptcy you file. 

Chapter 7: When you file for Chapter 7, you can have most, if not all, of your unsecured debts discharged, which includes your credit card debt. However, in exchange for having these debts wiped out, your non-exempt property could be sold by the bankruptcy trustee, and the funds will be used to pay off your creditors. 

Chapter 13: Filing for Chapter 13 works a little differently. With this type of bankruptcy, your credit card debts are generally not discharged upfront. Instead, you are given a more affordable payment plan that allows you to pay off your creditors with a monthly amount that is more suitable to your financial situation. 

This is important to understand because it can play a role in what happens if you run your credit card debt up. For example, if you run your credit card debt up and you file a Chapter 7, that debt could all get wiped out if the charges were necessary and not fraudulent. 

If you run the credit card debt up and then file a Chapter 13, you will still likely have to pay all of that debt off, but through a monthly payment—again, so long as the charges were legal and not found to be fraudulent.  

Running Up Credit Card Debt Prior to Bankruptcy

Generally, it is best not to use the credit card that you plan on including in your bankruptcy if you want your case to go as smoothly as possible. However, it is understandable that you may need to use your card for essential or necessary purchases, such as to pay for groceries, gas, or rent. 

However, if your creditors or bankruptcy trustee discover that you were running your balances up with fraudulent intent, it could result in serious consequences. For example, if you start making a bunch of unnecessary purchases knowing that you can just get away with not paying for them when you file for bankruptcy, this will likely be discovered. You could be charged with bankruptcy fraud or have your debt discharge denied. Likewise, taking out cash advances with your credit cards for unnecessary purchases can also be viewed as fraudulent. 

If your purchases are for necessary goods and services, then you should be fine, but if you made purchases with fraudulent intent, you could be asked to repay those debts. If you do not or cannot repay the debts, you could face an adversary proceeding lawsuit. 

Exceptions to Using Your Credit Card When Filing For Bankruptcy

Again, it is best to avoid using your credit card before filing for bankruptcy if you can, but the exception to using it will depend on whether you are purchasing what is considered necessary goods and services or luxury goods and services.

• Necessary goods and services: These are things that you need to live and support you and your family. This can include things like gas for your car to help you get to work, groceries to feed your family, or necessary clothing items, such as reasonably priced shoes for your child who needs them for physical education. 
• Luxury goods and services: These are things that you don’t need to work or live and are thus considered luxury and unnecessary. This can include buying designer brand items, vacation expenses, movie theater purchases, non-medical related spa purchases, etc.

How Sawin & Shea, LLC Can Help

At Sawin & Shea, we believe in providing compassionate and understanding representation to those struggling with debt and looking to file for bankruptcy. Being buried under overwhelming amounts of debt can be debilitating, and the last thing you need is to add more stress to the situation by worrying about your bankruptcy case. Our attorneys specialize in bankruptcy cases and can help walk you through the process every step of the way. We can even offer guidance after your bankruptcy case has ended. 

Contact us at 317-759-1483 or send us an email for a free consultation today!

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