When the economy shows signs of inflation, the Fed may raise interest rates to reduce economic activity and prevent prices from rising too rapidly. Conversely, the Fed may lower interest rates when the economy is sluggish, with high unemployment and low inflation. This encourages borrowing and spending, thereby boosting economic growth and job creation. 

The Fed balances inflation and unemployment by leveraging predictable monetary policy implications to ensure long-term stability and sustainable economic growth. So, How Can The Federal Interest Rate Increase Affect Your Money?

The Personal Finance Ramifications of Interest Rate Hikes

Knowing why the Fed adjusts rates is essential, but the bigger question is how those changes impact you. 

The most common economic impact of interest rate hikes on individuals include:  

1. Borrowing costs: When the Fed raises rates, borrowing becomes more expensive. This affects mortgages, credit cards, and other loans tied to critical benchmarks. Fixed-rate loans remain unchanged, but variable rates adjust, impacting borrowers.
2. Loan approvals: Higher rates can make lenders more cautious, leading to increased loan denials, especially for those with lower credit scores.
3. Savings and CDs: Savers can benefit from higher yields on savings accounts and CDs as banks seek deposits in response to Fed rate hikes.
4. Investments: The stock market reacts to Fed rate decisions, affecting investment portfolios and retirement accounts. Rate cuts may spur market rallies, while unexpected actions can lead to uncertainty.
5. Purchasing power: Fed policies influence inflation and consumer purchasing power. Lower rates stimulate spending, potentially fueling inflation, while rate hikes aim to control it.
6. Employment: Tightening credit conditions can impact businesses’ expansion plans and job creation despite positive job market indicators.
7. Effect on the housing market: Changes in interest rates can impact homebuyers’ affordability and demand for housing, influencing property prices and mortgage activity.
8. Consumer confidence: Consumer sentiment may be influenced by changes in interest rates, impacting spending behavior and overall economic activity.
9. Impact on retirement planning: Fed policies affect returns on fixed-income investments like bonds and CDs, influencing retirement savings strategies and withdrawal plans for retirees.

How To Protect Yourself from Rising Interest Rates

While a Fed rate hike may not be imminent, there are financial decisions you can make today to protect yourself when they go up.

Here are a few strategies that will minimize your risk of damaging personal finance ramifications from future rate hikes: 

1. Manage credit card debt: Prioritize paying down debt aggressively or explore options like balance transfers or debt consolidation to mitigate increased interest costs before rates rise.
2. Secure mortgage rates: Fixed-rate mortgage holders need not worry about changes, but prospective homebuyers may face higher mortgage rates. Consider locking in rates or exploring alternative financing options to minimize potential cost increases.
3. Evaluate auto loan terms: Act promptly to secure favorable rates or consider refinancing to capitalize on lower interest rates before potential increases.
4. Plan for student loan repayment: While existing federal student loans remain unaffected by interest rate changes, future loans may become costlier. Review repayment options and consider refinancing private loans before rates increase further.
5. Assess business financing: Evaluate the implications of higher borrowing costs on business operations and financing needs. Explore alternative financing options or strategies to manage cash flow and capital expenditures.
6. Review insurance policies: Assess the potential impact of rising interest rates on insurance premiums and policy returns. Consider consulting with an insurance advisor to review coverage options and possible adjustments.
7. Explore debt management solutions: Review existing debt obligations, such as personal loans or lines of credit, and assess the impact of rising interest rates on repayment terms. Explore debt consolidation or refinancing options to optimize repayment strategies.
8. Consider tax planning strategies: Evaluate potential tax implications of rising interest rates on investment income, capital gains, and other taxable transactions. Consult with a tax advisor to explore tax-efficient strategies for managing investments and minimizing tax liabilities.

Your best strategy is to stay informed on economic developments and be flexible in your financial plans so you can adapt as the market shifts.

Not All Outcomes of Higher Rates Negatively Impact You

Although rising interest rates are often unfavorable, they can benefit consumers and investors in various ways. 

Here are three ways you can benefit from higher rates:

1. Optimize savings: Rising interest rates translate to higher savings account yields. Look into high-yield savings accounts or certificates of deposit (CDs) that can maximize savings returns.
2. Monitor retirement accounts: Assess the impact of rising interest rates on retirement savings, including 401(k) plans and IRAs. Consider adjusting contributions or investment allocations to align with changing market conditions.
3. Evaluate investment strategies: Consider how rising interest rates may impact your investment portfolios. Review asset allocations and diversification strategies to identify risks associated with market volatility.

Rising interest rates may pose challenges, but by staying informed and adapting to evolving interest rates, you can mitigate the negative impact and set yourself up for long-term financial success.

Struggling with the Economic Impact of Interest Rate Hikes?

If you are wondering, “How Can The Federal Interest Rate Increase Affect Your Money?” Just reach out to our Law Firm or view our website for more information.

When rates go up, higher payments are just a little behind. If you’re having difficulty keeping up, call Sawin & Shea today at 317-759-1483 to discuss your debt relief options. 

Your initial consultation is always free. Click here to schedule a case evaluation with one of our experienced debt relief attorneys. 

If you’re wondering how the federal interest rate increase affects your money, Sawin & Shea is here to help! 

The post How Can the Federal Interest Rate Increase Affect Your Money? appeared first on Indianapolis Bankruptcy Attorneys of Sawin & Shea.

Make a Debt Payment Plan

The first step is getting organized by listing out all your debts – the creditor, interest rate, minimum payment, and total balance for each. This gives you a clear picture of what you owe. From there, decide on a debt repayment strategy that works for your situation. The debt snowball method has you pay minimums on all debts except the smallest, which you attack with any extra funds until it’s paid off. Then you roll that payment to the next debt. The debt avalanche approach is similar but focuses on paying the highest interest debt first. Apps like Undebt.it can help create a plan.

Cut Unnecessary Expenses

Going through your bills and bank statements with a fine-tooth comb can reveal expenses that are just nice-to-haves rather than needs. 

Trim things like:

• Streaming services beyond one basic plan
• Gym memberships if you can work out at home
• Subscription boxes 
• Cable TV
• Dining out frequently

Look for more affordable options for needs like cell phone plans, car insurance rates, etc. And be sure to take advantage of discounts, coupons, and loyalty programs.

Reduce Housing Costs

Housing is likely your biggest monthly expense. If your rent or mortgage is barely affordable, consider downsizing to a cheaper place. Or look into renting out a spare room to make some extra income from your living situation. You can also try negotiating your rent for a discount or lower rate.

Limit Transportation Costs

Gas, car insurance, maintenance, and other auto expenses can put a big dent in your budget. If possible, opt for public transportation, carpooling, or biking to save money. When buying a car, choose an affordable used vehicle and negotiate the best possible price. Maintain your car so it lasts longer and use apps to find the cheapest gas prices nearby.

Economize Utility Bills

Being mindful of energy usage at home can lead to lower utility bills, which frees up money to put towards debt. 

Take simple steps like:

• Adjusting the thermostat when away from home
• Switching to LED light bulbs
• Running appliances during off-peak hours
• Insulating drafty windows and doors

You can also call utility providers to discuss income-based assistance programs if you qualify.

Plan Affordable Meals

Food is another necessity where you can likely cut costs through budgeting and preparation. Make a grocery list based on weekly meal plans and stick to it. Buy generic, store-brand items as much as possible. Limit eating out and pack frugal lunches. Buy non-perishables in bulk and check for coupons/discounts. Apps like Ibotta offer cash back on groceries, too.

Earn Side Income  

If your regular income alone won’t be enough to make a dent in debt, look for side gigs and income streams to supplement it. Try freelancing skills like writing, coding, tutoring, or graphic design. Drive for a rideshare service, do tasks via apps like TaskRabbit, rent out a room on Airbnb, or sell items around the house. Every bit of extra income can go directly to paying down debt faster.

Use Extra Funds Wisely  

If you receive a tax refund, inheritance, bonus, or any other type of financial windfall, put as much of it as possible toward chipping away at debt balances. Avoid the temptation to splurge. Making a lump sum payment can reduce interest charges and shave months or years off your debt repayment timeline.  

Debt Negotiation and Bankruptcy

If all else fails and you truly cannot meet minimum debt payments,speak to a bankruptcy attorney to see if filing a case is right for you.

The path out of debt on a limited income requires sacrifice, budgeting discipline, and persistence. However, employing smart financial management techniques like those above can slowly chip away at what’s owed over time. Don’t lose hope – frugal living and opening new income streams can make it possible.

If you’re considering bankruptcy, remember that there’s no shame in filing. Bankruptcy is the best financial option for many with an excess of debt, and it may be the right tool to get your finances back on track. 

For bankruptcy assistance in Indiana, contact the experienced bankruptcy attorneys at Sawin & Shea, LLC. You can schedule a free case consultation today online or by calling 317-759-1483.

The post Ways to Cut Your Expenses And Get Out of Debt on a Low Income appeared first on Indianapolis Bankruptcy Attorneys of Sawin & Shea.

If you’ve gone through a Chapter 7 bankruptcy, you may be wondering if homeownership is still possible for you, especially if your credit has taken a major hit.

The good news is that you can eventually buy a house after bankruptcy, and having a cosigner can even help improve your chances.

Understanding the Home Buying Journey with Co-Signers and Bankruptcy

Before we dive into the specifics of buying a house after Chapter 7 with a cosigner, it’s essential to understand what a cosigner is and how bankruptcy affects them.

A cosigner is someone who agrees to be equally responsible for repaying a loan or debt if the primary borrower fails to make the payments.

In the case of mortgage loans, a cosigner essentially guarantees that the lender will receive the monthly payments, even if the primary borrower defaults.

When you file bankruptcy with Chapter 7, your qualifying debts are discharged, meaning you’re no longer legally obligated to pay them. However, this discharge only applies to you, the primary borrower – it doesn’t absolve co-signers from their responsibility to repay the debt.

This means that if you have a cosigner on a loan before you filed bankruptcy, they may be on the hook for the remaining balance after your bankruptcy process is finalized.

The lender can pursue legal action against your cosigner to collect the debt, and late or missed monthly payment can negatively impact their credit score and credit history.

Can a Co-Signer Help You Buy a House After Bankruptcy?

While having a cosigner doesn’t automatically guarantee that you’ll be approved for a mortgage loan after bankruptcy, it can certainly improve your chances. Lenders typically view a mortgage application with a cosigner more favorably because there’s an additional party responsible for making the loan payments.

However, it’s important to note that even with a cosigner, you’ll still need to meet the minimum credit score, waiting period, and other requirements set by the mortgage lenders and the specific loan type you’re applying for.

Additionally, lenders will likely consider the lower credit score between you and your cosigner when evaluating your mortgage application for an FHA loan or a conventional loan for a house after bankruptcy.

Remember that in most cases, you’ll need to wait 2-4 years after your Chapter 7 bankruptcy discharge or dismissal date before lenders will consider your home loan application.

Loan Types

Here’s a breakdown of the different loan types and each respective waiting period after a Chapter 7 bankruptcy discharge:

FHA (Federal Housing Administration) Loans: Lower than most conventional loans, a 2-year waiting period and a base credit score of 580 (or 10% down payment if your score is between 500-579) are expected with an FHA loan for a house after bankruptcy

VA Loans: Similar to an FHA loan, a 2-year waiting period and a base credit score typically around 620, also seen with a conventional loan, are common for VA loans

USDA Loans: With USDA loans, the regulations are more strict than with an FHA loan or a VA loan. Expect a 3-year waiting period and a required base credit score of 640

Conventional Loans: For a conventional mortgage, you’ll see 4-year waiting periods, longer than the FHA loan, USDA loan, or VA loan, and a base credit score of 620

It’s worth noting that these waiting periods are the minimum requirements set by the respective agencies.

Some mortgage lenders may have stricter guidelines and require longer waiting periods, even with a cosigner for each home loan type.

During this waiting period time frame, focus on rebuilding your credit through smart financial habits and reach out to lenders and real estate professionals when you’re ready to get pre-approved for a home loan.

Additionally, if your bankruptcy was caused by extenuating circumstances beyond your control (such as a job loss, medical bills, divorce, or other financial situation), you may be able to qualify for a mortgage sooner than the typical waiting periods to buy a house.

Down Payment and Mortgage Insurance Requirements

Another factor to consider when buying a house after Chapter 7 bankruptcy is having enough saved for a down payment and qualifying for acceptable terms.

In addition to the waiting period, different loan types have different down payment and mortgage insurance requirements:

FHA Loans: Usually require a minimum 3.5% down payment. You’ll also need to pay annual insurance premiums for the life of FHA loans unless you eventually refinance to a conventional loan.

VA Loans: No down payment is required if you have full VA loan entitlement. The VA also does not require any upfront or annual insurance.

USDA Loans: USDA loans require no initial payment, but the home must be in an eligible rural area as defined by the United States Department of Agriculture. Annual insurance fees apply for the life of the USDA loan.

Conventional Loans: Most lenders will want you to put at least 20% down to avoid paying private mortgage insurance (PMI). But some allow Fannie Mae or Freddie Mac conventional loans with just 3% down if you have good credit when you apply for a mortgage.

Risks and Considerations for Co-Signers

While having a cosigner can undoubtedly improve your chances of getting approved for a mortgage after bankruptcy, it’s crucial to understand the risks involved for the cosigner.

As mentioned earlier, when you file for Chapter 7, your cosigner remains legally responsible for repaying the debt.

If you default on the mortgage, your co-signer’s credit score and financial situation could be severely impacted. The lender may even pursue legal action against them to recover the outstanding balance.

It’s essential to have an open and honest conversation with your potential cosigner, ensuring they fully understand the risks they’re taking. They should be prepared to make the mortgage payments in full if you’re unable to do so for any reason.

Additionally, it’s important to differentiate between a co-signer and a co-borrower. A co-borrower is equally responsible for the mortgage loan from the outset, whereas a cosigner is only liable if the primary borrower defaults.

Rebuilding Your Credit After Bankruptcy

Regardless of whether you have a cosigner or not, rebuilding your credit after bankruptcy is crucial if you want to improve your chances of getting approved for a mortgage loan.

Here are some tips to help you rebuild your credit after a Chapter 7 bankruptcy:

1. Obtain a free credit report from the three major credit bureaus (Experian, Equifax, and TransUnion) and dispute any errors or inaccuracies.

2. Make all future loan and bill payments on time, as payment history is a significant factor in your credit report and on your credit score. Lenders want to see a solid history of making on-time payments for all your bills and responsibly managing your financial obligations before approving you for a mortgage after bankruptcy.

3. Consider getting a secured credit card or credit-builder loan to establish a new, positive credit history while making on-time payments. With a secured credit card, you put down a refundable security deposit that becomes your spending limit. Then make a small charge each month and pay it off in full. This helps create a positive payment history on your credit report.

4. Keep your credit utilization low by paying down high-interest debt like credit cards, car loans, and personal loans when working toward owning a house after bankruptcy.

5. Avoid taking on new debt, unsecured debts, or a car loan until your credit score improves.

6. Credit-builder loans are another option to build credit by making scheduled payments to yourself that are reported to the credit bureaus. Be wary of unsecured credit cards and other new debt until your credit score fully recovers.

By following these steps and being patient before you apply for a mortgage, you can gradually rebuild your credit and increase your chances of getting approved for a mortgage loan after bankruptcy, with or without a cosigner.

Writing a Letter of Explanation

In addition to rebuilding your credit, mortgage lenders will often require you to write a letter of explanation detailing the extenuating circumstances that led to your bankruptcy filing.

This letter is an opportunity for you to provide context and demonstrate that you’ve taken steps to address the underlying issues that caused your financial difficulties.

In your letter, be sure to explain the extenuating circumstances that led to your bankruptcy (if applicable), such as job loss, medical bills, or divorce.

Describe the steps you’ve taken to improve your financial situation, such as developing a budget, paying down debts, and establishing new, responsible credit habits.

A well-written letter of explanation can go a long way in convincing mortgage lenders that you’re a responsible borrower who has learned from past mistakes and is committed to making on-time mortgage payments beyond the extenuating circumstances that prohibited you before.

Working with Real Estate Agents and Getting Pre-Approved

Once your waiting period after bankruptcy is over and you’ve made significant progress rebuilding your credit score, it’s time to start seriously pursuing home loans again. A crucial early step is getting pre-approved for a mortgage.

A pre-approval letter from a lender shows real estate agents and home sellers that you are a qualified, motivated buyer. It gives you a clear price range to shop in based on your income, debts, and credit profile.

The pre-approval process also allows the lender to check that you meet the requirements for home loans like Fannie Mae or Freddie Mac conventional loans.

When applying for pre-approval, be prepared to provide documentation like W2s, pay stubs, tax returns, and bank statements. The lender will want to see that you have been making on-time payments on all bills and obligations post-bankruptcy. They’ll also need to verify that your Chapter 7 case was discharged by the court.

Know Your Options: Buying a House After Chapter 7 with a Co-Signer

While filing for Chapter 7 can undoubtedly make the home-buying process more challenging, it’s not an insurmountable obstacle.

By understanding the waiting periods for different loan types, rebuilding your credit, and considering the option of having a cosigner, you can increase your chances of getting approved for a mortgage loan after bankruptcy.

Remember, having a cosigner when you apply for a mortgage is not a guarantee of approval, and it comes with significant risks for the cosigner.

Be sure to have open and honest conversations about these risks and carefully consider whether a cosigner is the right choice for your situation.

If you’re navigating the complexities of bankruptcy and homeownership, it’s always advisable to consult with an experienced bankruptcy attorney who can guide you through the legal process and loan terms and help you make informed decisions regarding a home loan.

With patience, diligence, and the right support, you can overcome the challenges of bankruptcy and achieve your dream of homeownership.

Contact Sawin & Shea, LLC for Chapter 7 Bankruptcy Guidance

If you have any other questions about buying a house after multiple bankruptcies, dealing with remaining debt from a previous bankruptcy, bankruptcy court, or ensuring you meet all requirements, it’s wise to consult an experienced bankruptcy lawyer.

They can review your full financial situation and explain all available loan options and waiting period terms as you pursue homeownership after bankruptcy.

If you’re considering filing Chapter 7 bankruptcy or are going through the process, it’s important to remember that you don’t have to go through the steps alone. Bankruptcy is the best financial option for many struggling with debt, and it may be the right tool to get your finances back on track, rebuild credit, and on the road to homeownership. 

For bankruptcy assistance in Indiana, contact the experienced bankruptcy attorneys at Sawin & Shea, LLC. You can schedule a free case consultation today online or by calling 317-759-1483.

The post Can You Buy a House After Chapter 7 with a Co-Signer? appeared first on Indianapolis Bankruptcy Attorneys of Sawin & Shea.

The truth is, there is no set minimum debt amount required to file for bankruptcy protection. However, that doesn’t mean bankruptcy is the best option for everyone with debt. Before taking the step toward filing for bankruptcy, it’s crucial to know all your debts, understand your specific circumstances, the types of debt you have, and whether bankruptcy can provide the fresh start you need.

In this comprehensive guide, we’ll explore when filing for bankruptcy makes sense, how to determine if you qualify, the obligations that can be discharged, and the pros and cons of the different bankruptcy chapters.

Sawin & Shea, LLC: Your Trusted Guide to Financial Freedom Through Bankruptcy

If you’re a resident of Indiana struggling with overwhelming debt, the thought of filing for bankruptcy may have crossed your mind. While the process can seem daunting, partnering with the right legal team can make all the difference in navigating the complexities of the law and securing the fresh start you deserve. Enter Sawin & Shea, LLC – a firm with over 50 years of combined experience in bankruptcy services, dedicated to providing compassionate and non-judgmental representation to individuals and families in need.

At Sawin & Shea, LLC, our team of seasoned attorneys understands the weight of financial stress and the toll it can take on your well-being. With a deep commitment to personalized service, we take the time to understand your unique circumstances and tailor our approach to your specific needs. Whether you’re facing foreclosure, repossession, wage garnishments, or relentless creditor harassment, our expertise in bankruptcy law can offer the protection and relief you’ve been seeking.

One of our firm’s key strengths lies in our comprehensive understanding of both Chapter 7 and Chapter 13 bankruptcy options. If you qualify for Chapter 7 bankruptcy, our attorneys can guide you through the process of eliminating unsecured debts, such as credit card balances, medical expenses, and personal loans, within a matter of months. This powerful solution can immediately halt creditor harassment, wage garnishments, and lawsuits, allowing you to breathe a sigh of relief and regain control of your financial life.

What sets Sawin & Shea, LLC apart is our commitment to clear communication and accessibility. Our attorneys take the time to explain the bankruptcy process in a straightforward manner, ensuring you understand your rights and obligations every step of the way. We offer evening and weekend appointment options to accommodate your busy schedule, and our flexible payment plans make our services accessible to those in financial distress.

With a team of seasoned attorneys, you can trust that your bankruptcy case is in capable hands. If the weight of debt has become too heavy to bear, don’t hesitate to take the first step towards financial freedom. Contact Sawin & Shea, LLC today for a risk-free consultation and let our team of dedicated professionals guide you through the bankruptcy process with compassion, expertise, and a commitment to securing the best possible outcome for your unique situation.

When You Have Too Much Debt to Handle

Sometimes debt can pile up to the point where making even minimum payments feels impossible with your current income. Credit card balances, personal loans, and other unsecured debts can quickly spiral out of control, especially when combined with secured debts like a car loan or mortgage. A high interest rate makes it even harder to make progress paying down balances.

If you find yourself missing payments and looking to borrow money due to so much debt compared to your gross income, bankruptcy may be an option to regain your financial footing. Bankruptcy filers with income below their state’s median can potentially qualify for Chapter 7 to discharge many debts. However, certain debts like child support, alimony, and other domestic support obligations cannot be eliminated. Student loans are also difficult but not impossible to discharge in bankruptcy.

For wage earners with regular income above the median, Chapter 13 bankruptcy allows you to consolidate payments through a court-approved wage earner’s plan. Rather than settlements or minimum payments to each creditor, a single payroll deduction is made to fund your plan over 3-5 years.

Bankruptcy Law Provides a Fresh Start

While bankruptcy brings a negative mark on your credit report for up to ten years, it allows you to get out from under crushing debt you simply can’t repay. By filing for bankruptcy and receiving a discharge, you can prevent garnishments, foreclosure, vehicle repossession, and harassment from creditors and debt collectors.

Bankruptcy law was created to give debtors a true fresh start and pathway to rebuilding wealth. After bankruptcy, you can obtain new credit through a secured credit card or borrow more money through other means without old obligations weighing you down.

Just be sure to hire an experienced bankruptcy lawyer to correctly file all the required paperwork with the courts and properly list all assets, your bank account, and creditors. Bankruptcy legal fees are an investment in finally resolving your debt for good.

How Much Debt Is Enough? Do You Have Enough Dischargeable Debt to File Bankruptcy?

While there is no minimum debt amount for filing for bankruptcy, you’ll want to make sure you have enough dischargeable debt to make filing worthwhile. Dischargeable debts are those that can be eliminated through bankruptcy.

Some common dischargeable unsecured debts include:

• Credit card debt
• Personal loans
• Medical bills
• Utility bills
• Certain types of obligations without collateral

However, all your debts cannot be discharged, even when you file bankruptcy.

These non-dischargeable debts include:

• Most student loans
• Child support and alimony obligations
• Most tax debts
• Court fees, fines, and penalties
• Obligations from personal injury cases involving DUI

If the majority of your debt burden consists of non-dischargeable obligations like student loans or tax debt, bankruptcy may not provide significant debt relief. Take a close look at your debt breakdown to determine if you have enough tax debts and other obligations to make filing worthwhile.

The Bankruptcy Means Test

Even if you have considerable dischargeable debt, you’ll still need to pass the bankruptcy means test to qualify for Chapter 7 bankruptcy, which is a liquidation of assets to pay off creditors.

The means test compares your current monthly income to the median income for a household of your size in your state. If your income exceeds the median, you may not be eligible for Chapter 7 bankruptcy unless you can demonstrate special circumstances that would allow your filing.

For example, in Indiana, the current median annual income is:

• 1-person household: $60,351
• 2-person household: $77,580
• 3-person household: $91,461
• 4-person household: $105,581

If your household income is higher than the median for your household size, you may still be able to file Chapter 7 bankruptcy if you can pass the full means test calculation that factors in certain allowed expense deductions from your income.

Those who don’t pass the test according to bankruptcy laws are still eligible for Chapter 13 bankruptcy, which involves a court-approved debt repayment plan rather than liquidation.

Secured Debt vs. Unsecured Debt

Not all debts are treated equally in bankruptcy court. It’s critical to understand the difference between secured and unsecured debts according to bankruptcy code.

Secured obligations have collateral attached, such as a mortgage secured by your home or an auto loan secured by your vehicle. With secured debts, your creditors have the right to seize the collateral property if you default on payments.

In contrast, unsecured debt from unsecured creditors doesn’t have collateral attached. Credit card balances, personal loans, medical bills, and utility bills are generally unsecured debt.

Both secured and unsecured debts can typically be discharged in bankruptcy. However, handling secured obligations requires some additional considerations:

Chapter 7 Bankruptcy and Secured Debts

In Chapter 7 liquidation bankruptcy, you have three main options for dealing with secured debt:

1) Surrender the collateral back to the lender to discharge the debt

2) Reaffirm the debt by agreeing to remain obligated to the original contract terms

3) In some cases, you may be able to “redeem” the collateral by paying the creditor a lump sum equal to the current value

With mortgages and auto loans, many debtors choose to reaffirm and keep the collateral by continuing the monthly payments. Surrendering the home or vehicle can eliminate the debt but also means giving up the property.

Chapter 13 Bankruptcy and Secured Debts

With a Chapter 13 repayment plan bankruptcy, you can often keep secured assets like homes and vehicles while catching up on past-due payments over a 3-5 year repayment period.

By reorganizing secured debts and financial obligations into your repayment plan, Chapter 13 stops foreclosure or repossession, buys you time to get current, and may even allow you to cram down certain debts to lower minimum payments.

When Bankruptcy Makes Sense

In some situations, bankruptcy provides much more powerful debt relief than any alternative.

Here are some cases where filing makes the most sense:

• You have little or no assets to protect, and your debts exceed your ability to repay through other means like debt consolidation.
• When the assets you have are in danger from creditor action.
• Your major debts are dischargeable, such as credit cards, medical bills, personal loans, or payday loans.
• You missed your minimum amount of mortgage or auto payments, and Chapter 13 would allow you to keep the collateral while catching up over time.
• You are stuck in a cycle of barely making minimum payments on debt.
• You are facing lawsuits and judgements.
• Repossessions are pending.

If you’re facing harassment from aggressive debt collectors, considering bankruptcy may be wise simply to get the benefit of the automatic stay that stops creditor actions.

If your disposable income could support a Chapter 13 repayment structure, that option avoids liquidating assets in Chapter 7 bankruptcy. But if your income is below-median and Chapter 7 bankruptcy is a possibility, it may provide the quickest path to a true fresh start.

The Bankruptcy Filing Process

The bankruptcy process begins by having you provide documents and information needed to your attorney so that they can prepare a bankruptcy petition and schedules. You will then complete the required credit counseling from an approved agency. 

Your bankruptcy lawyer will work with you to complete detailed bankruptcy forms that disclose all assets, income, expenses, debts, and creditor information. These forms are filed electronically with the bankruptcy court.

According to the bankruptcy code, next you’ll attend a mandatory 341 meeting of creditors where you are sworn in and questioned by the bankruptcy trustee assigned to your case. The case trustee will examine the paperwork and ask questions to verify details about your assets, income, and debts.

Provided no issues arise at the 341 meeting:

• In a Chapter 7 bankruptcy case, the trustee will take control of any nonexempt assets to liquidate for creditor payouts. You’ll receive your discharge order within 60-75 days.
• In Chapter 13, your proposed 3-5 year repayment plan will go before the bankruptcy judge for confirmation. Upon completing all plan payments and meeting remaining obligations, you’ll receive your Chapter 13 debt discharge order from the court.

While a bankruptcy discharge eliminates your personal liability for the included debts, be aware that it will remain on your credit report for 7-10 years and impact your ability to obtain new credit for a period of time.

The Automatic Stay Provides Relief

One of the immediate benefits of filing bankruptcy is that it imposes an automatic stay. The automatic stay is a federal injunction that stops most creditor actions to collect debts from the moment your bankruptcy case is filed.

Specifically, the stay prohibits creditors from:

• Initiating or continuing any lawsuits
• Demanding payments from the debtor
• Sending letters or making collection calls
• Garnishing wages
• Foreclosing on mortgages or repossessing vehicles
• Shutting off utilities

This provides immediate relief from creditor harassment and legal actions. As long as the stay is in effect, creditors are banned from continuing collection efforts on debts that may potentially be discharged in your bankruptcy.

The automatic stay gives you some breathing room to get your finances in order. It also preserves your assets and income so they can be properly addressed during the bankruptcy process, rather than having them seized by aggressive creditors beforehand.

Making the Right Choice for Your Financial Future

As you can see, there is no universal minimum debt amount required to file for bankruptcy protection. The decision depends far more on your overall financial situation, disposable income, assets, income level, and the types of debts you’re facing.

For some, bankruptcy – whether Chapter 7 or Chapter 13 – is clearly the best path to resolving unmanageable debt and getting a true fresh start. For others, less drastic options like consolidation or debt settlement may allow for repayment without the negative credit impact of bankruptcy.

The key is making an informed choice based on your unique circumstances. Consulting with an experienced bankruptcy lawyer is the best way to understand all of your options and take the smartest next steps for your short-term relief and long-term financial health.

If bankruptcy makes sense for your situation, a qualified bankruptcy lawyer can guide you through every step of the filing process, from credit counseling to the meeting of creditors to your final discharge order. While it’s not an easy decision, bankruptcy was created to give good people an opportunity to recover from crushing debt and rebuild their lives.

Don’t let overwhelming debt drag you down when there are legal solutions available. Take control of your finances once again by exploring all of your debt relief options, including Chapter 7 bankruptcy and Chapter 13 bankruptcy protection in bankruptcy court. The path to becoming debt-free could be closer than you think.

Contact Sawin & Shea, LLC

If you are struggling with overwhelming debt and considering bankruptcy as a potential solution, don’t hesitate to take action. The team at Sawin & Shea, LLC has extensive experience guiding clients through filing bankruptcy. We know how much debt is too much debt and can help you explore all available options to find the best path forward. Don’t let unmanageable debt continue to weigh you down – contact Sawin & Shea today to schedule a free consultation to discuss attorney fees and take the first step towards your bankruptcy filing and financial freedom.

If you’re considering filing Chapter 7 bankruptcy or are going through the process, it’s important to remember that you don’t have to go through the steps alone. Bankruptcy is the best financial option for many struggling with debt, and it may be the right tool to get your finances back on track, rebuild credit, and on the road to homeownership. 

Take control of your finances and learn all about bankruptcy basics by calling the Sawin & Shea administrative office at 317-759-1483 or visiting us online to schedule your free bankruptcy consultation today.

The post How Much Debt Is Needed to File for Bankruptcy? appeared first on Indianapolis Bankruptcy Attorneys of Sawin & Shea.

This typically occurs because the debtor doesn’t have the money to pay all of their creditors, so they feel they need to rank which ones are more important to pay first. Maybe they got a tax refund and wanted to use the money to pay down some of their debt, or they sold some possessions in hopes of getting the debt under control.

They might give preference to the more aggressive creditors or try to pay off old debt first, but they choose to get one debt paid above all the rest. Under ordinary business terms, that’s sensible. But this decision to prioritize paying a single creditor over another can complicate their case should they decide to start bankruptcy paperwork.

When payments are made to some creditors over others, they can be considered preferential payments according to bankruptcy laws. Though a debtor may have just been trying to do what they thought was best, the bankruptcy court and the bankruptcy trustee may not see it that way.

The preferential payment rule exists to protect creditors, ensuring that they get what they’re owed in the event of bankruptcy. The bankruptcy trustee assigned to the debtor’s case will ensure equal distribution of the bankruptcy estate so that all creditors are paid the maximum amount possible.

Bankruptcy Filing and Preference Payments

When a debtor decides that the best way forward is filing bankruptcy, that’s not a decision that is undertaken lightly. To determine the best way to proceed, and whether Chapter 7 or Chapter 13 bankruptcy are right for you, you should meet with an experienced bankruptcy lawyer.

A bankruptcy lawyer can help you create a strategy to protect your assets and ensure that your bankruptcy petition goes as smoothly as possible.

Before you decide to make any payment that could potentially be construed as a preference payment, consult your attorney. They’ll help you avoid potential pitfalls within the bankruptcy code.

Bankruptcy Code on Preferential Payment

Bankruptcy law is in place to ensure all creditors are paid fairly and to prevent creditors from unfairly pursuing debtors at the expense of other creditors.

If you file for bankruptcy and the court determines that you prioritized paying a creditor over others, the bankruptcy trustee assigned to oversee your case could go to the preferred creditor, get the funds back, and distribute them evenly amongst your creditors.

When a debtor makes a transfer— defined as money paid or a non-monetary act, such as returning goods to the original creditor— to a creditor that qualifies as a preferential transfer, it can be reversed by the bankruptcy trustee to ensure that other creditors are paid.

Preferential payments include:

• Payments made to one creditor on a debt that existed before the time the payment was made.
• Payments exceeding $600 in the 90 days before filing, known as the preference period or look back period
• Payment amounts exceeding the amount that the creditor would have received in bankruptcy
• Payment not made in exchange for new value
• Payment not made in the ordinary course of business or financial affairs between the debtor and the payee

Additionally, the code specifies that these payments must have been made to a “non-insider” creditor. Insider creditors include a friend, family, member, or business associate.

If the payments were made to an insider creditor, the preference period changes from 90 days to within one year of filing.

Secured vs. Unsecured Creditor

A secured creditor has a lien of some kind on a debtor’s property. Bank-owned assets that have a recurring monthly payment, like mortgage payments or an auto loan fall under this category. They can repossess the assets in question if the debtor is delinquent in payment, so there’s less risk in making the loan.

If the debtor’s payment history is in good stead, their assets owned by a secured creditor are safe— their home or their car, for example.

Unsecured creditors lend money without any collateral. These debts are higher risk, as they have nothing to seize if the debtor doesn’t make regular payments.

A good example of this type of creditor is a credit card company; they extend borrowers credit without requiring any collateral. Other regular creditors include utility companies, landlords, doctors or hospitals. Family members. business, or even a general partner, classified as insider creditors, are classified as other unsecured creditors.

Of course, failure to pay unsecured creditors can negatively impact a bankruptcy filer; it can impact their credit score, making it hard to secure other loans. However, these creditors cannot seize assets if they haven’t received payment within the requisite time period.

Preferential Payment Reversals: A.K.A Clawbacks

According to preference rules, the trustee assigned to your bankruptcy case can review the financial transactions that occurred before filing for bankruptcy.

If any payments made to creditors during the preference period are classified as preferential transfers, the trustee assigned to your case can reverse these payments through a preference claim, also known as a clawback.

Preference suits revert any payments deemed to the debtor’s bankruptcy estate. Then, all the funds available will be evenly distributed amongst all creditors, as the trustee demands. Clawback or preference claims are considered a central proceeding in bankruptcy cases.

Not everything can be resolved by a judge in a bankruptcy case unless it is a central proceeding, meaning clawback procedure can and will be resolved in the Bankruptcy Court. There is no way to avoid it if preference payments were made.

Once the money is secured after the preference suit, the trustee will begin distributing funds.

Exceptions to Preference Payment Claims

Of course, a creditor who has been paid won’t be eager to give back money paid by the debtor, even if it could potentially be considered a preference payment. There are exceptions that businesses can claim to keep the money they were paid.

These include:

• If the money was paid in a “contemporaneous exchange for new value,” the subsequent transfer might not be categorized as a preferential transfer. In other words, if the debt incurred was for something new, not an old debt or antecedent debt, it would be classified as a contemporaneous exchange.

• Payments made to regular creditors in the “ordinary course of business” wouldn’t be considered preference payments. If, for example, a debtor had a recurring order set up for their business and, historically, the debtor pays for this order within 30 days and that 30-day payment window is considered to be standard for the industry, payments made within the preference period will likely stand. It’s considered part of the ordinary course of business and the defense applies.

• If a payment was made for a “subsequent transfer of new value,” it could be ineligible for clawback. For instance, if a debtor makes a $30,000 payment to a creditor for an old debt that wasn’t classified as the ordinary course of business, that would be classified as preferential payment. However, if the same creditor provided the debtor with $20,000 of product after that payment was made but the debtor in possession of the product did not make an additional payment, they could argue that they should be able to keep $20,000 of the original $30,000 payment to cover this newly incurred debt.

If a creditor can prove any of the exceptions above, they could be permitted to keep the money paid to them.

Of course, a debtor wants to ensure that all their creditors are paid for services rendered, but the bankruptcy laws must be carefully followed. An experienced bankruptcy attorney can help navigate these challenges.

Avoiding Preference Payment in the Future

Though making a preferential payment is not illegal, and you will not get in trouble for doing so, it is best avoided when possible.

The only time a debtor can face charges for making preferential payments is if they intentionally made them to defraud a creditor or hide money. In this case, you may face criminal charges and risk losing the benefit of having your debt discharged through a bankruptcy filing.

Typically, however, most debtors make preferential payments without realizing they are doing so or because they feel they have no other option. If they have enough money to discharge a debt, they believe it’s the best thing to do under the circumstances.

You will not be punished in these cases, but if you think that you may file for bankruptcy again at some point, it is something to keep in mind when you are determining how to pay each creditor.

How Sawin & Shea, LLC Can Help

If you are concerned about preferential payment affecting your bankruptcy case and aren’t sure what to do, it can be helpful to consult an experienced bankruptcy attorney.

Bankruptcy lawyers handle cases like this every day and will know how to guide you through the process to ensure everything is done correctly.

At Sawin & Shea, we believe in providing compassionate and understanding representation to all of our clients who file for bankruptcy and are determined to help you achieve the best possible outcome.

Our attorneys are highly experienced in bankruptcy cases and are here to help you through the process every step of the way.

If you have any questions about filing for bankruptcy, contact us at 317-759-1483 or send us an email for a free consultation.

The post What Are Preferential Payments in Bankruptcy? appeared first on Indianapolis Bankruptcy Attorneys of Sawin & Shea.

While Chapter 13 is effective for debt relief, many worry about how this filing method may negatively affect their credit scores. Some even have the misconception that their bankruptcy filing will eliminate their credit entirely.

Fortunately, the impact of Chapter 13 isn’t nearly that dire, but it often does, initially, have a negative impact on credit reports. In this blog, we’ll discuss how Chapter 13 usually affects credit scores, and we’ll give you actionable tips to begin rebuilding your credit.

If you have additional questions regarding Chapter 13 or Chapter 7 bankruptcy, contact the attorneys at Sawin & Shea, LLC. We have years of experience assisting Indiana residents with the bankruptcy process, and we offer FREE consultations.

What Is a Chapter 13 Bankruptcy Filing?

Chapter 13 is a personal form of bankruptcy, as opposed to Chapter 11 “reorganization” bankruptcy, which is generally used for businesses and other entities. While different from Chapter 11, Chapter 13 is similar in the sense that it involves reorganizing and consolidating debts.

This filing method is referred to as “the wage earner’s plan” because filers repay some of their debt balances with their regular income. Rather than paying off all of their financial obligations at once, those who file Chapter 13 pay into a plan over a three-to-five-year period.

You first initiate the Chapter 13 bankruptcy legal process by filing a petition in court. The court will then order a bankruptcy stay — also called an automatic stay — that prohibits creditors and lenders from collecting what you owe.

After you file, you create a repayment plan based on your income and assets. This plan states that you’re committed to paying back something to creditors in monthly installments, and you detail the minimum amount you’ll pay as well as the duration of the plan.

Chapter 13 Bankruptcy Discharge

Once you complete paying off your repayment plan over three to five years, the court will discharge your eligible debts.

Common types of dischargeable debt include:

• Credit card debt
• Medical debt
• Judgements
• Utility bills
• Back rent
• Personal loans
• Repossession balances

While Chapter 13 helps you repay certain debts and discharge remaining balances, not all forms of debt are dischargeable.

You will not be able to discharge:

• Family and child support
• Most student loans
• Most local, state, and federal taxes

How Does Filing Bankruptcy Impact Your Standing with Credit Bureaus?

Those considering filing for Chapter 13 have likely suffered from exorbitant amounts of debt from credit cards, medical bills, or personal loans. After all, if you don’t have debt, why would you be interested in filing bankruptcy in the first place?

Overwhelming debt can impair your credit reports from the major credit bureaus — Equifax, Experian, and TransUnion. This is especially the case if you’re behind on your credit payments.

Fortunately, if you already suffer from a poor credit score, your bankruptcy filing will likely not seriously impact your score. It could even improve your credit score.

On the other hand, those who have good credit scores may see their scores shrink when filing, and this risk increases with a greater score. For instance, someone with a 500 FICO score. will likely not suffer from a notably reduced score, but someone with a FICO score of 750 certainly will.

Fortunately, you can rebuild your credit score after you file for Chapter 13.

Do Creditors Prefer Chapter 13 Bankruptcy?

While Chapter 13 can negatively affect your credit report, lenders and creditors usually favor those who filed Chapter 13 compared to those who filed Chapter 7 bankruptcy.

The reason why creditors prefer you file Chapter 13 is because Chapter 7 bankruptcy discharges unsecured debts after the trustee liquidates nonexempt assets. This means that unsecured creditors, such as credit card companies, won’t receive what the debtor owes. Instead, the creditors will consider the unpaid balances as charge-offs, meaning losses.

With Chapter 13, you usually repay at least a portion of your unsecured debts through your three-to-five-year repayment plan. Your prospective creditors have a higher regard for those who file this method because it’s more likely that you’ll repay your debts going forward. Chapter 13 shows that you’re more likely to use your credit responsibly and pay back your debts to creditors.

That said, Chapter 13 is not for everyone, and some of those struggling with overwhelming consumer debt should instead consider Chapter 7 bankruptcy.

How Long Will Chapter 13 or Chapter 7 Bankruptcy Remain On My Credit Report?

Many of those considering bankruptcy worry about how long the filing will remain on their credit reports. The duration you can expect will depend on whether you file for Chapter 13 or Chapter 7.

Chapter 7 bankruptcy remains on your credit report for up to ten years and you cannot file another Chapter 7 for eight years after discharge. Chapter 13, on the other hand, will remain on your credit report for up to seven years after you file bankruptcy.

One critical note is that the seven years begins on your filing date and includes the period in which you make regular payments. This means that you can expect this negative information to be wiped from your credit report two to four years after your Chapter 13 bankruptcy discharge. If it takes you three years to pay off your plan, the bankruptcy will remain on your credit report and affect your FICO score for up to four years. If it takes you five years, the bankruptcy will remain for up to two years after the discharge.

Additionally, if you pay off your plan within one or two years, the bankruptcy will remain on your credit report for a total of seven years.

Can I Take on New Credit During My Chapter 13 Bankruptcy Filing?

Typically, you’re not allowed to secure new credit after you’ve filed bankruptcy. You’ll need to first finish your repayment plan. The reason why is that taking on new debt suggests to the bankruptcy court that you may be unable to maintain your plan for the full period. If you can’t fulfill your financial obligations per your bankruptcy petition, the court will dismiss your bankruptcy case, meaning you won’t be able to discharge your remaining debts.

There are some situations in which you will need to incur additional debt while going through the bankruptcy procedure, such as unexpected vehicle or home repairs. In these cases, it’s critical to consult with a Chapter 13 bankruptcy attorney to assist you. A bankruptcy lawyer can help you find a creditor who’s willing to work with you, and they’ll file a motion to receive permission from the court and the bankruptcy trustee.

Rebuilding Your Credit Score After Chapter 13

After your discharge, the three main credit bureaus will send you copies of your credit report. With this information in hand, it’s time to rebuild and repair your credit score.

Unfortunately, you’ll likely need to pay higher credit interest rates for a few years after your filing, but once you strengthen your credit report, you’ll be able to secure lower rates. Here are some effective ways to improve your credit score moving forward.

Avoid Accumulating Too Much Debt

Wiping your unsecured debts clean doesn’t mean you should return to old habits. It’s best to refrain from taking on too much debt in the first few years following your discharge. This is especially important while your interest rates remain high. Accumulating too much debt may escalate to high credit utilization and challenging credit card balances.

Obtain a Secured Credit Card

You may struggle to find creditors who are willing to lend to you while you repair your credit score. Fortunately, you can obtain a secured card that includes collateral. Credit card companies often feature secured cards for people with little to no credit history or poor credit. You’ll need to pay a minimum fee — usually around $200 — that will serve as collateral, but credit card companies often repay these fees once debtors remain in good standing for an extended period.

Another great option is a credit builder loan, which is intended to help those with poor credit or limited credit histories. While larger lenders usually don’t offer these loans, you may be able to find one through a community bank or credit union.

Make On-Time Payments

Opening up a new line of credit is essential for repairing your credit score, but you need to ensure that you always make on-time payments. Otherwise, you’ll receive negative marks on your credit report. Consider setting regular reminders to make on-time payments or enroll in autopay.

Add a Co-Signer To a Loan

If your recent bankruptcy is making it challenging to secure a loan, such as an auto loan, consider adding a co-signer. Having someone else co-sign will increase your likelihood of receiving approval on a loan or a new line of credit with a lower interest rate.

Further, you can add an authorized user to your credit card account to accelerate the process of strengthening your credit report. One critical note is that you should only add a user if you trust them. If they rack up a high balance and make late payments, they may actually hurt your credit report.

Become an Authorized User

In addition to adding someone to your credit card account, another person can add you to their account. That way, their on-time payments will appear on your credit report. Only become a user on someone else’s card if they make on-time payments and keep their balances relatively low. Otherwise, their credit usage could negatively affect both of your credit reports.

Maintain Healthy Credit Utilization

While it’s important to use credit cards, loans, and other financial instruments to raise your credit score, you need to ensure your credit utilization rate remains below 30%. Your credit utilization rate refers to the sum of your balances compared to your total available credit. For instance, if you have a total of $40,000 worth of credit and owe credit card companies $10,000, your credit utilization rate is 25%.

Contact a Chapter 13 Bankruptcy Attorney Today

Bankruptcy laws are complicated, and it’s essential to ensure you file correctly.

Fortunately, you don’t need to go through your bankruptcy case alone — you can contact the seasoned Chapter 13 bankruptcy lawyers at Sawin & Shea, LLC by calling us at 317-759-1483. In addition to helping you file bankruptcy, we’ll provide financial guidance so you can begin restoring your finances and improving your credit score. 

The post Does Chapter 13 Wipe All of Your Credit? appeared first on Indianapolis Bankruptcy Attorneys of Sawin & Shea.

Because Chapter 7 involves a Chapter 7 Trustee selling off certain non-exempt assets, many who consider this bankruptcy method worry about what assets and possessions they can retain. Fortunately, the vast majority of those filing are able to keep all of their possessions.

That said, no two bankruptcy cases are the same, and your Chapter 7 liquidation process will depend on your individual circumstances. Though most Chapter 7 cases are what we callf “no-asset cases” meaning you keep all of your possessions. To fully gauge what you may lose, it’s best to get in touch with a bankruptcy attorney who can give advice and guidance as you undergo your bankruptcy filing to discuss your personal assets.

For experienced bankruptcy lawyers in Indiana, contact Sawin & Shea, LLC. We’ll help you understand what personal property and other assets you can keep and identify assets that may be at risk, and we’ll guide you through the entirety of your bankruptcy case.

In this blog, we discuss what assets and property a debtor may lose in Chapter 7 bankruptcy. We’ll unpack the difference between an exempt and non-exempt asset, and we’ll discuss what debts you can discharge.

What Is Chapter 7 Bankruptcy?

Chapter 7 is also known as liquidation bankruptcy because it involves liquidating (selling off) non-exempt assets belonging to the debtor to repay creditors and lenders. The bankruptcy trustee will sell your non-exempt assets to pay a portion of your debts to creditors. You’ll then be able to discharge the balance of eligible debts, such as credit card debt and medical bills.

You’ll need to complete the bankruptcy process before discharging your debts, but filing has immediate benefits, including an automatic stay. The automatic stay prohibits creditors and lenders from attempting to recover what you owe. They cannot take legal action against you or seize your assets.

Chapter 7 Means Test

Not every debtor is eligible for Chapter 7 bankruptcy, and higher-income earners are less likely to qualify. As part of the bankruptcy paperwork process, your attorney will run an income-based test called the Means Test. This is a test that determines if you are eligible for a Chapter 7 bankruptcy. If you are not, this test determines how much you are required to pay back to your unsecured creditors in a Chapter 13 reorganization. 

Indiana’s median income changes from year to year. As of 2024, the annual median incomes are as follows:

• 1 Member Household – $60,351
• 2 Member Household – $77,580
• 3 Member Household – $91,431
• 4 Member Household – $105,581
• and add $9,900 for every additional family member

If your income is beyond these limits, you’ll need to complete the means test before filing. This test calculates your disposable income by evaluating your earnings compared to your essential expenses.

There are calculators online, but it’s best to consult with a bankruptcy attorney to ensure you calculate your disposable income accurately. If you file a bankruptcy petition and it turns out your income is too high, the bankruptcy court will dismiss your case.

Some useful documents and information you should bring to your attorney as a debtor to calculate whether you’re eligible for Chapter 7 bankruptcy include:

• Income taxes
• Child care expenses
• Alimony and child support information
• Information regarding your mortgage and car loans
• All of your sources of income
• Your spouse’s income
• Unemployment benefits
• Workers’ compensation benefits
• Indiana government income

In addition to this test, prospective filers must also meet another qualification. They cannot file for Chapter 7 bankruptcy if they’ve already filed within the past eight years. Fortunately, you might be able to file Chapter 13 instead.

Reaffirming Debts in Chapter 7 Bankruptcy

Chapter 7 bankruptcy allows you to discharge your unsecured accounts, but you cannot do away with a creditor’s a security interest, meaning a debt with collateral must either get paid or the collateral property surrendered. Mortgages and car loans are both considered secured debts because they both have backing collateral.

Although you can’t eliminate your mortgage or car loan in Chapter 7 bankruptcy and hold onto the collateral, you can reaffirm these debts. When you reaffirm a debt, you’re essentially agreeing to be liable for the account again despite your bankruptcy.

Your mortgage and car loan lenders will likely be fine with you reaffirming these debts as long as you aren’t behind on payments and the collateral is properly insured. You’ll be able to keep your asset because you’ve reaffirmed your intention to pay off this debt.

Credit Counseling

Before you file your Chapter 7 bankruptcy petition, you’ll need to complete a credit counseling course through an approved counseling agency. The U.S. Bankruptcy Code requires debtors to complete credit counseling courses 180 days before filing.

Filing Your Chapter 7 Petition

After completing credit counseling, your attorney will help you fill out and eventually submit all necessary Chapter 7 bankruptcy forms. These forms will help the bankruptcy court understand your financial situation and why you need to file.

You’re under no legal obligation to have an attorney help you with these forms, but having a legal professional assist you can make the process easier and help you avoid serious issues. Bankruptcy is a complicated process and not understanding the process can lead to serious problems that can lead to a denial of discharge, loss of assets, and dismissal of your case.

Once complete, you’ll file your bankruptcy petition, and you’ll need to pay a filing fee.

The Bankruptcy Trustee

When you file Chapter 7 bankruptcy, the court will assign a trustee to your case. This trustee will be in charge of your bankruptcy estate. They will assess your financial information and debts, and they will inform your creditors about your bankruptcy status.

The bankruptcy trustee is also responsible for selling a debtor’s nonexempt assets to repay creditors.

The Meeting of Creditors

Your court-appointed bankruptcy trustee will organize your 314(a) meeting, also called the meetings of creditors. Here, the trustee and any creditors who attend can ask you questions under oath about your finances to ensure you were honest in your bankruptcy petition.

After the meeting, you’ll need to complete an approved financial management course. These courses are intended to educate debtors so that they don’t make the same mistakes that led to their bankruptcy.

Will the Bankruptcy Trustee Sell All of My Personal Property?

The court-appointed trustee will not sell off all of your assets and property. Instead, they’ll merely sell non-exempt property and assets to pay off a portion of debts to unsecured creditors.

Fortunately, exempt assets include necessities, as the liquidation process isn’t supposed to deprive you of property that’s necessary to live and work. We’ll go into great detail about exact Indiana exemptions including non-exempt property and exempt property later in this blog, but let’s first discuss what assets a debtor may potentially lose in Chapter 7 bankruptcy.

What Assets Can I Lose In Chapter 7 Bankruptcy?

Bankruptcy law states that any non-exempt assets can be sold off to pay creditors.

Common types of assets and nonexempt property a debtor could potentially lose in Chapter 7 bankruptcy include:

• Vacation properties
• Investment accounts
• Stocks and bonds
• Rental properties
• Luxury items
• Valuable artwork
• Jewelry
• Antiques
• Lien free vehicles
• Electronics
• Musical instruments
• Real estate.

If you have a great deal of non-exempt assets and own your home, you likely will want to consider Chapter 13 rather than Chapter 7 bankruptcy. That way, you create a payment plan based on your income. You’ll make monthly payments over the course of three to five years, and you’ll be able to keep all of your assets, including your real estate properties and vehicles.

What Are Exempt Assets in Chapter 7 Bankruptcy?

Bankruptcy exemptions in Chapter 7 allow filers to retain certain assets. These exemptions differ from state to state, and federal bankruptcy exemptions are also available in some states. In this section, we’ll detail what assets and property a debtor will be able to keep.

Does Indiana Use Federal Exemptions in Bankruptcy?

Indiana has its own state exemptions, and Indiana residents must abide by these exemptions rather than federal exemptions outlined in the U.S. Bankruptcy Code.

It’s also important to note that new residents may not be able to access Indiana exemptions. A debtor must have lived in Indiana for 730 days before filing in order to benefit from the state exemptions. If a debtor lived in Indiana for less than 730 days before filing, they must follow the asset exemptions of the state where they lived previously.

Indiana Homestead Exemption

The Indiana homestead exemption enables the person filing Chapter 7 to keep a portion of their home’s equity. This will also apply to personal property that classifies as a residence, such as a mobile home.

An important note is that this exemption only includes property that is your primary residence. You cannot use this exemption to protect an asset such as a rental property or vacation home.

The exemption amount is $22,700 of equity in property or real estate. You can also double this amount to $45,400 of equity protection if you’re married and filing jointly. Your spouse must co-own the home in order to double the equity protection.

Unfortunately, you cannot double your exempted amount if you have a non-filing spouse, but if a spouse is on the real estate with you a special exemption could apply. 

Indiana Personal Property Exemption

In addition to retaining equity in your home, Indiana bankruptcy state law includes a personal property exemption that protects tangible property and nonresidential real estate.

This exemption limit is $12,100 worth of tangible property, and this amount doubles when a debtor is married and files jointly with their spouse.

Some types of an asset of tangible property you could protect include:

• Jewelry
• Clothing
• Luxury items
• Antiques
• Equity in vehicles
• Instruments
• Furniture
• Electronics
• Other valuable belongings
• Equity in a rental or vacation property

Further, this exemption allows you to protect $450 worth of an asset of intangible property, once again doubling when you file bankruptcy with a spouse. This includes cash, money in bank accounts as of the filing date, claims against others, money people owe you, stocks, and other cash equivalents. Retirement accounts are generally exempt.

Does Indiana Have a Motor Vehicle Exemption?

State law does NOT feature an exemption for motor vehicles, such as cars, vans, trucks, etc. People filing bankruptcy can protect their vehicles through the personal property exemption. You’ll be able to protect equity in the vehicle(s) to the extent that you have available exemptions.

Other Bankruptcy Exemptions

There are also other important bankruptcy exemptions to consider when filing Chapter 7.

These exemptions include various accounts, benefits, settlements, and property including:

• Your retirement account
• Pension and IRA accounts
• Firefighter pension funds
• Police pension funds
• Legislator benefit plans
• Public employee retirement accounts
• Health savings accounts
• Medical care savings accounts
• Spendthrift trusts
• Indiana State Teachers’ Retirement Fund benefits
• Fraternal benefit society benefits
• Some life insurance policies
• Unemployment benefits
• Workers’ compensation 
• Health aids
• Military equipment, uniforms, and arms
• Specific partnership property

Finally, Indiana allows you to keep part of unpaid wages. This will either be 75% of your unpaid wages or 30 times the Federal minimum wage, whichever is less. An attorney can help determine exemptions in your case.

What Is a Non-Exempt Asset or Non-Exempt Property? What Debts Do I Discharge in Chapter 7 Bankruptcy?

If the bankruptcy trustee sells off your non-exempt assets, they will distribute the proceeds to creditors according to bankruptcy law, and then you’ll be able to discharge most debts that are unsecured. The bankruptcy trustee usually pays off a portion of the money owed to the debtor’s unsecured creditors through the liquidation of the debtor’s assets. Even if you can’t fully pay creditors, you will still be able to discharge your eligible debts.

Common types of dischargeable debt include:

• Credit card debt
• Medical debt
• Repossessions
• Judgements
• Evictions
• Unpaid phone bills
• Personal loans
• Unpaid utility bills

What Debts Can I Not Discharge in Chapter 7 Bankruptcy?

Types of loans and debts are exempt from discharge, including:

• Debt from child support
• Debt from alimony and divorce proceedings
• Student loan debt
• Back taxes from the last three years (and possibly years previous)
• Court penalties and fines owed to governmental agencies
• Debt you owe for a personal injury settlement that occurred because you drove under the influence of alcohol or drugs

Contact a Chapter 7 Bankruptcy Attorney Today

Chapter 7 bankruptcy can be daunting, especially if you’re not sure what assets you risk losing. It’s best to contact a Chapter 7 bankruptcy attorney who can assist you with your bankruptcy case. An attorney who practices in bankruptcy law can help you as the debtor determine asset exemptions and will help you navigate the differences between an exempt and non-exempt asset and get your bankruptcy filed correctly.

Making mistakes during the bankruptcy case process could lead to your case being dismissed. Your legal representative will also help with aggressive creditors and will protect you from harassment from other creditors.

For experienced bankruptcy attorneys in Indiana fluent in bankruptcy code, contact the law office of Sawin & Shea, LLC. We have over 45 years of bankruptcy experience with asset cases and can help you navigate the complexities of Chapter 7 and your assets and other property.

You can schedule a FREE consultation at our office with one of our bankruptcy lawyers today online or by calling our Indianapolis office at 317-759-1483. Our office also offers public assistance for certain legal cases. 

The post What Assets Do You Lose in Chapter 7? appeared first on Indianapolis Bankruptcy Attorneys of Sawin & Shea.

This debt relief option is the best choice for numerous indebted individuals, and it shouldn’t merely be considered a last resort — It’s a proactive solution that can help you regain financial stability.

Although there’s no reason to feel ashamed for filing, many hold negative beliefs about personal bankruptcy, and they make wrongful assumptions about those who file.

Due to the negative perceptions of bankruptcy, many professionals worry about whether bankruptcy affects their ability to retain professional licenses and certifications. They also wonder how their filing may impact future employment opportunities and their standing with employers.

In this blog, we discuss how Chapter 7 and Chapter 13 bankruptcy, when filed, can affect professional licenses, certifications, your job, and prospective employment opportunities.

How Will Filing Bankruptcy Impact My Professional License?

The short answer is that filing bankruptcy should NOT impact your current professional licenses or certifications. Federal law protects those who file against discrimination, and this includes having your license revoked.

Bankruptcy Code Section 525(a) states that:

“…a governmental unit may not deny, revoke, suspend, or refuse a license, permit, charter, franchise, or other similar grant to…a person that is or has been a debtor under this title or a bankrupt or a debtor under the Bankruptcy Act.”

Your bankruptcy alone shouldn’t affect your professional license, but you may need to report that you declared bankruptcy, depending on your type of license or certification. Ensure you research whether you’re obligated to report your bankruptcy before filing or reach out to an experienced bankruptcy attorney to assist you.

Will Bankruptcy Affect My Ability to Obtain a New License or Certification?

If you file bankruptcy, it could determine your ability to obtain a new professional license. Bankruptcy alone shouldn’t determine whether or not you get or lose the license, but the licensing board or state board will evaluate you holistically. During that process, they may consider your finances, missed payments, and credit, especially if your career requires you to handle money.

Again, bankruptcy shouldn’t be the sole factor in determining whether an applicant can obtain a professional license, but a poor credit report can negatively affect an applicant’s chances. An applicant’s bankruptcy and credit check may also reveal serious issues that may impact their license status, such as fraud.

Professional Licenses and Loan Defaults

While a bankruptcy filing alone shouldn’t ruin your chances of obtaining a license, defaulting on certain loans and debts can. In fact, defaulting may even jeopardize your current license status.

Types of loan and debt defaults that may affect your professional license include:

• Child support
• Student loans
• Alimony

Can My Bankruptcy Filing Affect My Employment?

It is against the law for an employer to fire you on the basis of your bankruptcy, and this includes both government and private employers. Additionally, the Bankruptcy Code states that it’s illegal for employers to demote you or reduce your pay or responsibilities because of your bankruptcy.

If you suspect that you’ve been fired or demoted due to your bankruptcy, you should contact a labor attorney to assist you, as there’s no excuse for workplace discrimination.

While bankruptcy laws prohibit an employer from treating an employee differently, your bankruptcy case may still impact your employment, depending on your profession.

For example, lawyers and real estate agents may be prohibited from holding money or assets on behalf of clients while undergoing bankruptcy and fulfilling financial obligations. That said, these limitations are temporary.

Additionally, bankruptcy may indicate other financial problems that can impact your status with your employer, such as fraud or defaulting on certain loans.

Your employer cannot reduce your pay or fire you because you filed bankruptcy, but they can fire you for fraud, defaulting, and bad credit, especially if you’re responsible for handling money.

Will My Current Employer Find Out About My Bankruptcy?

While you can rest assured that you won’t be fired if you file for bankruptcy, you may still worry that your employer and co-workers will lose respect for you. Again, there’s no reason to feel ashamed if you file for bankruptcy, but it’s understandable to care what others think.

Fortunately, it’s unlikely that your office or other workplace will learn that you filed bankruptcy. You’re under no obligation to disclose your bankruptcy to your company. In most cases, they will not find out.

That said, there are some situations in which your office could learn of your bankruptcy. For example, if your salary payments were garnished to repay creditors, your bankruptcy will halt the garnishment. Your employer will be notified of the bankruptcy in order to stop the wage garnishment.

Additionally, your employer could find out if they run a credit check on you, but they need to receive your permission to check your credit. Further, your employer could require you to receive a new security clearance, and they will likely discover that you filed bankruptcy during that process.

Can Bankruptcy Affect My Future Job Prospects?

Filing bankruptcy can impact your employment opportunities. Bankruptcy laws state that public employers cannot take your bankruptcy into consideration during the hiring process. As we’ve discussed, there may be other reasons related to your bankruptcy that could impact your job application with a public employer — such as defaulting on student loan debt — but the bankruptcy alone shouldn’t compromise your application.

While public employers cannot consider bankruptcy filings when deciding whether to hire you, the law does not apply to private employers. If you apply for a job with a private company, the prospective employer may decide to deny you due to your bankruptcy. Unfortunately, this can cause you to lose potential opportunities, especially if your career involves finances or accounting.

Some of the ways in which private employers discover bankruptcy filings include security clearance background checks and credit checks. Additionally, they can search for your bankruptcy since it’s part of the public record. If your job application requires you to undergo a background or credit check, it’s best to inform the company that you’ve filed.

File Bankruptcy with the Help of an Experienced Lawyer

If you’re considering filing for bankruptcy, it’s best to work with an attorney to help you with your case. For Chapter 13 and Chapter 7 attorneys in Indiana, contact Sawin & Shea, LLC.

Our attorneys have years of experience assisting Indiana professionals through the bankruptcy process, and we can help you get your finances back on track.You can schedule a FREE case consultation today online or by calling 317-759-1483.

The post What Is the Impact of Bankruptcy on Professional Licenses and Certifications? appeared first on Indianapolis Bankruptcy Attorneys of Sawin & Shea.

They believe those declaring bankruptcy are irresponsible or bad with money.

The truth is that there’s nothing to be ashamed of in filing for bankruptcy — bankruptcy is a great option for debt relief and overcoming financial problems, and filing could be your best option for getting your finances back on track. Additionally, your personal bankruptcy will likely not impact job opportunities with a new employer.

That said, there are some situations in which your current or prospective employer will find out about your filing status.

In this blog, we take a close look at ways Chapter 7 bankruptcy affects future or current employment. If you have additional questions, we encourage you to read our online articles about filing bankruptcy. Additionally, you can reach out to the Sawin & Shea team for further support.

You can get a free consultation by contacting us online or calling us at (317) 759-1483, and we’ll review your personal situation.

What Is Chapter 7 Bankruptcy?

Chapter 7 is often referred to as liquidation bankruptcy. The bankruptcy court will liquidate non-exempt assets in order to pay back some of your debt. Fortunately, most of those who file bankruptcy are able to keep all of their possessions.

This form of bankruptcy differs from Chapter 13, which involves the evaluation of your current income to construct a three-to-five-year debt reorganization plan.

Bankruptcy Court Process

Now, let’s unpack what you can expect in your bankruptcy proceedings. When you file a Chapter 7 petition, you’ll receive an automatic stay protecting you from lawsuits and other collection efforts. This bankruptcy protection will prohibit a collection agency or another creditor from recovering debt or taking action against you.

You’ll also be assigned a trustee to manage your bankruptcy case. The bankruptcy trustee will oversee the process of liquidating non-exempt assets to repay your creditors, and they will organize a 341 meeting, also known as the Meeting of Creditors.

During this mandatory meeting, the trustee and attending creditors, if any, will ask you questions under oath regarding your financial situation. You’re not required to have legal representation in the meeting, but it’s best to have a bankruptcy lawyer to support and assist you.

Completing Chapter 7

To complete Chapter 7, you are required to undergo a finance management course as well as credit counseling. You must complete credit counseling within 180 days of filing your petition, and you’ll need to complete a debtor education course after your Meeting of Creditors.

After completing your required courses and undergoing the liquidation process, you’ll be able to discharge certain debts. The bankruptcy discharge will eliminate your unsecured debts, including unpaid medical bills and credit card debt.

Will My Bankruptcy Filing Impact My Current Employment?

In the event that you file for bankruptcy, it should not affect your current job. It is against federal law for an employer to fire an employee due to their bankruptcy filing, and this applies both to government agencies and private employers.

The U.S. Bankruptcy Code states that filing for bankruptcy can not be considered employment misconduct by a manager or company.

If an employer fires their employee due to a bankruptcy filing, it’s considered employment discrimination, and the former worker can sue them.

Bankruptcy Law

Additionally, bankruptcy law states that your place of employment cannot treat you differently for filing. Your employer cannot reduce your wages, demote you, or strip you of work responsibilities. An employee’s bankruptcy has no bearing on their work performance, and an employer cannot punish them for filing.

If you’ve filed for bankruptcy and it now impacts your current job, you should contact an employment lawyer.

There’s no excuse for workplace discrimination, and your bankruptcy case should have no impact on your status in the company.

Can Bankruptcy Affect My Job Application When Applying for Government Employment?

Government employers are prohibited from considering bankruptcy when determining whether to hire a job applicant. This means that if you apply for a government job, they cannot deny you employment due to your bankruptcy filing status.

Some public employers require job applicants to undergo a background check, especially if they need a security clearance. The government employer will learn that you have filed bankruptcy when you go through this process.

You may find this embarrassing, but the government agency still can’t deny you employment on the basis of your bankruptcy filing.

If you apply for a position with a federal, state, or local government agency, you can rest assured that your bankruptcy won’t get in the way of obtaining a job.

Can Bankruptcy Affect My Job Application When Applying in the Private Sector?

Unlike public employers, private employers can deny you a job for filing for bankruptcy, and bankruptcy can affect future employment in certain occupations. In practice, however, employers discriminating against a potential employee for filing a bankruptcy case is rare.

The way in which these private employers find out about applicants’ bankruptcy statuses is through credit checks. Chapter 7 filings can remain on credit reports for up to ten years.

In addition to bankruptcy issues, poor credit history can impact your ability to secure employment in finance management, and Chapter 7 will negatively impact your credit report.

Your prospective employer needs to obtain your consent before initiating a credit check, but they will likely deny you employment if you refuse to let them see your credit report.

Additionally, your potential employer may require you to obtain a security clearance, especially if the work involves government contracts. As discussed in the previous section, security clearances require background checks, and your employer will learn about your bankruptcy during the process.

There’s no guarantee that they will deny you a job, but they have the right to.

If a company requests to run a credit check or requires a security clearance, it’s likely in your best interest to be honest about having filed for bankruptcy, as they will most likely find out anyway. You do not want to let omitting information about your bankruptcy affect your new job. Fortunately, many private employers will not care about your bankruptcy.

Will My Current Employer Find Out About My Bankruptcy?

As we’ve discussed, your employer may find out about your bankruptcy if you undergo a credit check or a background check for a security clearance.

If you are currently employed and need to file bankruptcy, you may wonder whether your work will find out. Again, potential bankruptcy filers don’t need to worry about losing their jobs, as this is considered discrimination, but you may be concerned about your manager or co-workers thinking of you differently.

Fortunately, it’s unlikely that your place of employment will find out that you filed for bankruptcy, and most employers will not care. That said, there are a few ways in which employers learn about employee bankruptcy filings. If you had a wage garnishment, filing bankruptcy will halt the financial encumbrance, and your employer will be notified that they no longer need to set aside part of your wages for a creditor.

Additionally, employers learn about bankruptcy filings when employees owe money to them. You must list all forms of debt when filing, and that includes if you owe an employer money.

After filing for bankruptcy, the bankruptcy trustee will inform your employer about your bankruptcy status as well as details regarding the Meeting of Creditors.

Will The Bankruptcy Court Publish My Filing?

It’s important to note that the court will publish your bankruptcy case, making it part of public record that many employers may check. This means anyone searching for your filing status will be able to find it online. That said, if your employer has no reason to search for you if you’ve filed bankruptcy, it’s unlikely that they will find out.

Contact a Bankruptcy Attorney

If you’re considering filing bankruptcy, we wholeheartedly encourage research to find your best options. While there are many online articles available, it’s best to enlist the help of an experienced bankruptcy attorney. They can help you by protecting you from aggressive creditors, and they can assist you with getting your finances back on track. Finally, an experienced bankruptcy attorney can help you with bankruptcy paperwork as well as other steps in the filing process on your path to debt relief.

This will ensure you do everything correctly so that you can discharge all eligible debts and become desirable to any employer.

For assistance from a bankruptcy lawyer in Indiana, contact Sawin & Shea LLC. We have over 45 years of combined experience assisting Indiana residents through the bankruptcy process, and we offer support in filing Chapter 7 and Chapter 13 bankruptcy.

You can schedule your free consultation today online or by calling 317-759-1483.

The post What Happens If I Get a Job After Filing Chapter 7? appeared first on Indianapolis Bankruptcy Attorneys of Sawin & Shea.

This page addresses the most common questions about selecting the right attorney to help you address your tax problems and other financial concerns. Choosing the right solution is a big step that could affect your life for years to come.

If you’re worried about garnishments, foreclosures, lawsuits, repossessions, or other consequences of your debt, connect with an experienced bankruptcy lawyer at Sawin & Shea as soon as possible. You deserve a fresh start.

What’s the Difference Between a Tax Attorney and a Bankruptcy Attorney?

A tax attorney specializes in helping people understand income taxes and how the IRS works. They typically answer questions from a debtor about back taxes, filing annual tax returns, and tax penalties they may owe.

A bankruptcy attorney helps someone clarify and organize their finances while getting most types of debt discharged. They usually assist people with pursuing the common routes of Chapter 7 bankruptcy or Chapter 13 bankruptcy to address tax debt. They’ll help you resolve your back taxes as part of a broader bankruptcy plan for your finances.

If you simply need help preparing your taxes, or if you have basic questions about your income taxes or tax debt, a tax specialist is your best bet. However, contact a bankruptcy lawyer if you have a complicated financial picture that may require significant financial reorganization.

Bankruptcy attorneys address other important debt-related issues, like paying income tax debt, resolving credit card debt, and stopping creditor harassment. They help their clients ensure most old debts are discharged and start a new plan for financial stability, in addition to satisfying the IRS.

Choosing a Bankruptcy Lawyer vs. a Tax Lawyer

A tax lawyer can help with most basic tax-related tasks like:

• Getting your income taxes paid, including late payment penalties
• Identifying tax fraud
• Resolving most tax debts
• Making regular payments on income tax debt
• Answering many basic taxpayer inquiries

Bankruptcy lawyers address more than just clients’ tax relief and debt issues. Working with a bankruptcy lawyer is about taking a broader look at your entire financial picture beyond taxes to apply a bankruptcy filing wisely.

• Understanding the bankruptcy code and related law
• Selecting Chapter 7 bankruptcy or Chapter 13 bankruptcy
• Sorting through certain tax debts you may or may not owe to creditors
• Identifying priority debts vs. non-priority debts
• Making a plan to clear out credit cards, medical bills, and other debts owed, including interest
• Addressing tax debt issues related to property and belongings
• Evaluating recent tax debts vs. old tax debts
• Protecting a debtor’s assets while filing for bankruptcy
• Ensuring a bankruptcy petition is properly filed through the bankruptcy court

Does My Bankruptcy Lawyer Need a Tax Background?

New laws and trends impact how people manage their finances. A bankruptcy lawyer with a tax background helps you get the most out of your tax debt relief and ensures filing bankruptcy runs as smoothly as possible.

IRS Issues and Dischargeable Debt

Bankruptcy involves analyzing your tax debt and determining what may be dischargeable. This includes determining what you owe, when you filed relevant returns, the dates of your assessments, and what interest and penalties may apply. 

You’ll determine what’s dischargeable while keeping you in the good graces of the IRS. Your bankruptcy plan can be filed to pay back nondischargeable portions while still working to discharge as much tax debt as possible.

Handling Tax Debt and Refunds

Do you know how much of your tax refund you can keep when filing? Your lawyer should be able to give you a much clearer understanding of how your tax refund will be incorporated into the bankruptcy. Review your exemptions and withholding to see opportunities to keep the maximum within the law.

Protecting What You Own

Asset protection is always a concern when filing bankruptcy. If you have property, collections, investments, capital gains, or other valuable assets, ensure your attorney is fully qualified to address the range of your financial interests.

You may have questions about voluntarily or involuntarily surrendering real estate, for example. This can have a tax impact on your bankruptcy, so discuss your concerns with your lawyer.

Who Will Help Me Determine if My Debt is Dischargeable?

A bankruptcy attorney can help you determine if your tax debt is dischargeable. While a tax specialist is helpful in terms of helping you address specific concerns about your tax return, a bankruptcy attorney can move forward with bankruptcy and protect your assets while making a plan to hopefully discharge tax debt and other debts.

Factors in Determining Whether Debt is Dischargeable in Bankruptcy

How recent is the debt?

Did you already file a tax return related to this debt in the years prior to this one?

When was your IRS tax return filed and assessed?

Has a lien been filed on your property?

Do you have other debt, loans, discharged debts, or other amounts owed?

What paperwork have you received from the IRS about this debt?

Are you selecting Chapter 7 bankruptcy or Chapter 13 bankruptcy?

Can a Bankruptcy Lawyer Help Me Resolve Tax Debt?

If you’re finding it challenging to pay back taxes to the IRS, a tax attorney can provide insight into what the IRS is demanding and how people typically address the situation. A bankruptcy attorney can help you use the bankruptcy process to try and get rid of tax debt.

More Tax Attorney vs. Bankruptcy Attorney Questions? Ask Sawin & Shea

If you still have questions about resolving your tax debts, please contact the experienced bankruptcy team at the law office of Sawin & Shea, LLC. We offer a fast path to financial freedom.

Start your free consultation today by calling 317-759-1483.

The post Tax Attorney vs Bankruptcy Attorney: What’s the Difference? appeared first on Indianapolis Bankruptcy Attorneys of Sawin & Shea.