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. 

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.   

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.