As an Indiana bankruptcy attorney, I frequently encounter clients who have debts with a credit union. Often, I find these clients also have their mortgage, car loans, credit cards and lines of credit with that same institution. While this is a testament to the good customer service offered by credit unions, it often creates difficulties for people facing bankruptcy. Credit union, unlike traditional banks, almost always take an "all or nothing" approach with members who file bankruptcy.
By that, I mean that the credit union will not enter into a reaffirmation agreement on your car loan but not your mortgage or credit cards. Their position is that if they are forced to suffer a loss because of the member's bankruptcy (i.e., you want to keep your car but not your mortgage and credit card debt) then they will not allow you to do business with them at all. The credit union demands that you reaffirm all debt (so you remain liable for all debt owed to them even after the bankruptcy) or you do not reaffirm on any debt. In these tough economic times, I would think credit unions would rather get some money as opposed to none. Apparently, the credit unions do not see it that way.
I do not write this post to discourage people from using credit unions. However, I do think it is important for people looking at bankruptcy to understand the issues they face IF they have debt with a credit union.
Contact my office today at 317-566-2080 if you have questions or need more
imformation on this or other bankruptcy related matters. You can also visit my
website at www.vanwinklelegal.com.
Friday, May 11, 2012
Thursday, May 10, 2012
Is child support or spousal maintenance dischargeable in bankruptcy?
Generally speaking, child support and/or spousal maintenance are not dischargeable in bankruptcy. If the Bankruptcy Court can be convinced that the spousal maintenance is being paid as a property settlement agreement and is just being called maintenance, then the Court may discharge that portion in a bankruptcy.
It has become increasingly difficult to discharge these types of debts in bankruptcy. They are actually given priority treatment and are paid ahead of all other creditors. Also, in a Chapter 13, if you fail to stay current on child support and/or spousal maintenance, the Court can deny your discharge (the order that says you no longer owe your debts).
As an Indianapolis, Indiana bankruptcy attorney, I can help you sort through these types of issues. I can be reached at 317-566-2080.
It has become increasingly difficult to discharge these types of debts in bankruptcy. They are actually given priority treatment and are paid ahead of all other creditors. Also, in a Chapter 13, if you fail to stay current on child support and/or spousal maintenance, the Court can deny your discharge (the order that says you no longer owe your debts).
As an Indianapolis, Indiana bankruptcy attorney, I can help you sort through these types of issues. I can be reached at 317-566-2080.
I surrendered my house in bankruptcy but I still own it....what happened?
So you filed bankruptcy and surrendered your house. You moved out and thought you had put the loss of your home behind you. Then, months later you get a letter or call from your friendly neighborhood code enforcement officer. Why is he contacting you? You don't own the house anymore....right? As an Indianapolis, Indiana bankruptcy attorney, I am frequently faced with this question. The reality is that under Indiana law (and most other states as well), you continue to own the home until such time as it is sold at a Sheriff's Sale. Since you still own it, you are still responsible for making sure the property is kept in good condition (and in compliance with city codes regarding lawn care, etc.). If you fail to maintain the lawn, or keep the sidewalks in a clean and safe condition (or comply with any other city housing codes), you can be held personally responsible. This could result in costly fines being levied against you after the bankruptcy is discharged. You would be forced to pay them.
The same is true for your homeowner's association dues. Until the house sells at a Sheriff's Sale, you will continue to be responsible for the dues that accumulate after the bankruptcy. Any dues you owed at the time of filing will be discharged. However, any dues assessed after the date of filing and before the Sheriff's Sale will be your responsibility.
Another area of concern is your responsibility to third parties who are injured on your property or by your property after you have filed bankruptcy and surrendered the home. Since you are the owner of the property and entitled to "all incidents of ownership" until a Sheriff's Sale takes place, you could be held liable for third party injuries. A homeless man decides to crash in your now vacant home and he falls down a flight of stairs. He could opt to sue you for the injuries he sustains. Whether he would prevail in that lawsuit is another story, but he could certainly pursue you.
What if your empty house burns to the ground and in the process catches the neighbor's house on fire....are you liable for the damage? You would most likely be responsible since you are still the owner of the property and therefore still responsible for the house.
This is where your homeowner's insurance kicks in.....right? Well that depends on whether you or the mortgage company have kept the home insured. Most mortgage companies escrow insurance premiums these days, but if you are not paying your mortgage payments, the property might not be insured. Even if it is insured, it may not cover injuries sustained by third parties. The mortgage company may have taken out "forced place" insurance that will protect their interest in the property
only but not protect you against claims from third parties.
The important lesson to learn here is that just because you surrendered your home in a bankruptcy does not mean you are no longer the owner of the property. It is important to take steps to protect yourself until the Sheriff's Sale takes place.
If you have questions/concerns regarding this or other matters, please contact The Law Office of Travis Van Winkle, LLC. 317-566-2080.
The same is true for your homeowner's association dues. Until the house sells at a Sheriff's Sale, you will continue to be responsible for the dues that accumulate after the bankruptcy. Any dues you owed at the time of filing will be discharged. However, any dues assessed after the date of filing and before the Sheriff's Sale will be your responsibility.
Another area of concern is your responsibility to third parties who are injured on your property or by your property after you have filed bankruptcy and surrendered the home. Since you are the owner of the property and entitled to "all incidents of ownership" until a Sheriff's Sale takes place, you could be held liable for third party injuries. A homeless man decides to crash in your now vacant home and he falls down a flight of stairs. He could opt to sue you for the injuries he sustains. Whether he would prevail in that lawsuit is another story, but he could certainly pursue you.
What if your empty house burns to the ground and in the process catches the neighbor's house on fire....are you liable for the damage? You would most likely be responsible since you are still the owner of the property and therefore still responsible for the house.
This is where your homeowner's insurance kicks in.....right? Well that depends on whether you or the mortgage company have kept the home insured. Most mortgage companies escrow insurance premiums these days, but if you are not paying your mortgage payments, the property might not be insured. Even if it is insured, it may not cover injuries sustained by third parties. The mortgage company may have taken out "forced place" insurance that will protect their interest in the property
only but not protect you against claims from third parties.
The important lesson to learn here is that just because you surrendered your home in a bankruptcy does not mean you are no longer the owner of the property. It is important to take steps to protect yourself until the Sheriff's Sale takes place.
If you have questions/concerns regarding this or other matters, please contact The Law Office of Travis Van Winkle, LLC. 317-566-2080.
Tuesday, April 24, 2012
Credit Card Debt Continues to Climb
As a result of what has quite possibly been the worst economy we have seen in this country in the last twenty years, I am seeing personal credit card debt reach new heights. As an Indianapolis bankruptcy attorney, I have seen more and more clients who have turned to their credit cards to keep the lights on and food on the table.
If your credit card debt has become unmanageable or you are simply not able to pay the cards as a result of a job loss, bankruptcy may be the right answer for you. However, there are some concerns to watch out for as we create a plan of action.
If you have incurred a substantial amount of credit card debt within a certain amount of time before the filing of your case, you may be faced with a creditor trying to stop you from discharging the debt. This is especially true if you incurred the debt after you knew or reasonably should have known that you could not afford to pay the debt. If you used your credit cards to pay tax obligations you may be faced with a similar discharge challenge.
This is why it is critical to work with my bankruptcy office to create the best course of action. I can help you understand the potential pitfalls you would face in filing for bankruptcy. I can also show you how the date of filing can reduce or eliminate the odds that a creditor may try to raise an objection to you discharging the debt you owe to them.
If your credit card debt has become unmanageable or you are simply not able to pay the cards as a result of a job loss, bankruptcy may be the right answer for you. However, there are some concerns to watch out for as we create a plan of action.
If you have incurred a substantial amount of credit card debt within a certain amount of time before the filing of your case, you may be faced with a creditor trying to stop you from discharging the debt. This is especially true if you incurred the debt after you knew or reasonably should have known that you could not afford to pay the debt. If you used your credit cards to pay tax obligations you may be faced with a similar discharge challenge.
This is why it is critical to work with my bankruptcy office to create the best course of action. I can help you understand the potential pitfalls you would face in filing for bankruptcy. I can also show you how the date of filing can reduce or eliminate the odds that a creditor may try to raise an objection to you discharging the debt you owe to them.
Contact my office today at 317-566-2080 if you have questions or need more imformation on this or other bankruptcy related matters. You can also visit my website at www.vanwinklelegal.com.
My spouse wants to file bankruptcy....but I don't.....
As an Indianapolis bankruptcy attorney, I am frequently confronted with the situation where one spouse wants to file bankruptcy but the other spouse does not. Most clients who ask me about this situation are happy to hear that they do not have to file just because their spouse wants to do so or needs to do so.
However, the entire household's income and expenses will be taken into consideration by the Court in determining whether the filing spouse qualifies to do so as a Chapter 7 or a Chapter 13. While one spouse may not want to file it may be necessary to do so depending on the value of your assets. The exemptions (amount of equity in your property) almost always doubles when both spouses file jointly.
If you are not sure if you need to file or should file with your spouse, please feel free to set up a bankruptcy consultation appointment with me (317-566-2080). My office is on the north side of Indianapolis but I serve clients throughout the metropolitan area and beyond. I look forward to assisting you.
However, the entire household's income and expenses will be taken into consideration by the Court in determining whether the filing spouse qualifies to do so as a Chapter 7 or a Chapter 13. While one spouse may not want to file it may be necessary to do so depending on the value of your assets. The exemptions (amount of equity in your property) almost always doubles when both spouses file jointly.
If you are not sure if you need to file or should file with your spouse, please feel free to set up a bankruptcy consultation appointment with me (317-566-2080). My office is on the north side of Indianapolis but I serve clients throughout the metropolitan area and beyond. I look forward to assisting you.
Friday, April 13, 2012
What happens to your property if you file bankruptcy?
As an Indiana bankruptcy attorney with my practice primarily in Indianapolis, I am frequently confronted with people wanting to know "what happens to my property if I file bankruptcy"....and it is an important question. You have worked hard to accumulate certain assets and you want to keep them. Trust me...I get it and part of the planning process requires me to work with clients to determine what they own and show them how I can protect those assets. By the way, most people filing for bankruptcy do not own any property that can be taken away from them by the Bankruptcy Court.
Under the Bankruptcy Code, each state can decide whether to follow the federal exemptions (rules that set forth what property you can keep) or create their own. Indiana long ago decided to create their own exemptions. In most cases, the exemptions apply to each debtor (person filing bankruptcy). So in a joint case the exemption values usually double.
Let's talk about your house first and foremost as that is what most of my Indiana bankruptcy clients are concerned about. We have what is referred to as a Homestead exemption. It is $17,800.00 which doubles to $35,600.00 for spouses who co-own their homes. So if your house is jointly owned with your spouse and is worth $130,000.00 but you owe $100,000.00 on it, then the bankruptcy trustee cannot attempt to take your house from you as the exemption has consumed all of your equity. If the house is not your primary residence then a different set of rules apply as that type of property is not given homestead protection. Instead, it would be covered by the general "wildcard" exemption.
For Indiana bankruptcy filers that "wildcard" exemption is $9,350.00 per individual or $18,700.00 for jointly owned property if both spouses file bankruptcy. This exemption applies to equity in real estate that is not your primary residence, cars, furniture, clothing, jewelry and other tangible items of personal property. As stated above, it is rare for a client to have equity in personal property that exceeds the exemption. As a result, most clients are able to keep all of their personal property.
Most retirement accounts are also exempt from collection regardless of their value. To receive this protection, the accounts must meet certain federal criteria. If the account was established through your employer and was funded with pre-tax contributions then it is exempt and therefore protected. Certain other retirement accounts can be shielded as well....even those set up by individuals who are self-employed. However, this must be examined on a case by case basis.
The Indiana bankruptcy exemptions allow you to protect up to $350.00 for non-tangible personal property (some examples.....monies in a bank account on the date of filing, tax refunds received after the date of filing of your bankruptcy, and non-retirement investment accounts.)
While the norm is that as an Indiana bankruptcy attorney I can protect your assets as part of the bankruptcy process, it is critical that full disclosure of the assets is made from the start. This will allow me to apply the appropriate exemptions to your property.
If you are contemplating filing bankruptcy, please feel free to contact my bankruptcy office. Even if you do not live in the Indianapolis area I can still be of assistance as bankruptcy hearings for most people living in central Indiana are held in Indianapolis or handled by the Indianapolis Bankruptcy Court. Please visit my website (www.vanwinklelegal.com) for more information.
Under the Bankruptcy Code, each state can decide whether to follow the federal exemptions (rules that set forth what property you can keep) or create their own. Indiana long ago decided to create their own exemptions. In most cases, the exemptions apply to each debtor (person filing bankruptcy). So in a joint case the exemption values usually double.
Let's talk about your house first and foremost as that is what most of my Indiana bankruptcy clients are concerned about. We have what is referred to as a Homestead exemption. It is $17,800.00 which doubles to $35,600.00 for spouses who co-own their homes. So if your house is jointly owned with your spouse and is worth $130,000.00 but you owe $100,000.00 on it, then the bankruptcy trustee cannot attempt to take your house from you as the exemption has consumed all of your equity. If the house is not your primary residence then a different set of rules apply as that type of property is not given homestead protection. Instead, it would be covered by the general "wildcard" exemption.
For Indiana bankruptcy filers that "wildcard" exemption is $9,350.00 per individual or $18,700.00 for jointly owned property if both spouses file bankruptcy. This exemption applies to equity in real estate that is not your primary residence, cars, furniture, clothing, jewelry and other tangible items of personal property. As stated above, it is rare for a client to have equity in personal property that exceeds the exemption. As a result, most clients are able to keep all of their personal property.
Most retirement accounts are also exempt from collection regardless of their value. To receive this protection, the accounts must meet certain federal criteria. If the account was established through your employer and was funded with pre-tax contributions then it is exempt and therefore protected. Certain other retirement accounts can be shielded as well....even those set up by individuals who are self-employed. However, this must be examined on a case by case basis.
The Indiana bankruptcy exemptions allow you to protect up to $350.00 for non-tangible personal property (some examples.....monies in a bank account on the date of filing, tax refunds received after the date of filing of your bankruptcy, and non-retirement investment accounts.)
While the norm is that as an Indiana bankruptcy attorney I can protect your assets as part of the bankruptcy process, it is critical that full disclosure of the assets is made from the start. This will allow me to apply the appropriate exemptions to your property.
If you are contemplating filing bankruptcy, please feel free to contact my bankruptcy office. Even if you do not live in the Indianapolis area I can still be of assistance as bankruptcy hearings for most people living in central Indiana are held in Indianapolis or handled by the Indianapolis Bankruptcy Court. Please visit my website (www.vanwinklelegal.com) for more information.
Tuesday, June 23, 2009
Is it enough
President Obama recently signed a new law into effect regarding lending practices on the part of credit card companies. This law is designed to offer relief from the nasty practices we have all become too familiar with in the last couple of years. The new law will not take effect until February of 2009. While the law will make significant changes that will provide relief to many debtors (more on the relief below), the concern is that this bill will not help so many people already on the verge of financial disaster.
As an Indiana bankruptcy attorney, I see people everyday who are being pushed over the "edge" by rising interest rates, reductions in available credit, soaring fees and other predatory lending practices. Until the law takes effect in February, I think we will see the credit card companies do everything in their power to make our lives more difficult. We can expect further reductions in available credit as well as increases in interest rates and other fees. These are the very types of things this law is designed to prevent but because the credit card lobby is so strong, the relief so many of us need now won't be available in time to prevent bankruptcy.
The significant benefits provided under this bill are set forth below. For those who are able to hold on until this law takes effect, these changes will help lessen the financial pressure...or at least that is what the Obama administration hopes it will do. Only time will really tell if the desired effect becomes a reality.
1. Interest rate changes can only be made after 45 day advance notice.
2. Interest rate increases will not be allowed on already existing balances.
3. You have to be over 18 to get a credit card and if you are under 25, you must take (and pass) a course designed to test your financial knowledge.
4. Interest will be charged on the current month's balance as opposed to an average of the last two months balance.
5. The font size on credit card statements and agreements will be increased to 12 point to make it easier for people to read (Now we just need to take the time read the agreements and understand them).
6. You can't be charged a processing fee for Internet or phone payments.
As an Indiana bankruptcy attorney, I see people everyday who are being pushed over the "edge" by rising interest rates, reductions in available credit, soaring fees and other predatory lending practices. Until the law takes effect in February, I think we will see the credit card companies do everything in their power to make our lives more difficult. We can expect further reductions in available credit as well as increases in interest rates and other fees. These are the very types of things this law is designed to prevent but because the credit card lobby is so strong, the relief so many of us need now won't be available in time to prevent bankruptcy.
The significant benefits provided under this bill are set forth below. For those who are able to hold on until this law takes effect, these changes will help lessen the financial pressure...or at least that is what the Obama administration hopes it will do. Only time will really tell if the desired effect becomes a reality.
1. Interest rate changes can only be made after 45 day advance notice.
2. Interest rate increases will not be allowed on already existing balances.
3. You have to be over 18 to get a credit card and if you are under 25, you must take (and pass) a course designed to test your financial knowledge.
4. Interest will be charged on the current month's balance as opposed to an average of the last two months balance.
5. The font size on credit card statements and agreements will be increased to 12 point to make it easier for people to read (Now we just need to take the time read the agreements and understand them).
6. You can't be charged a processing fee for Internet or phone payments.
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