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What Happens When I Fall Behind On Chapter 13 Payments?

Chapter 13 bankruptcy requires monthly, on-time payments.   But, what happens when you fall behind on Chapter 13 Payments?  Falling behind on Chapter 13 payments can result in several possible outcomes.    Let’s discuss what can happen when you fall behind on Chapter 13 payments.

What if I am behind on Chapter 13 bankruptcy payments

Falling Behind on Chapter 13 Payments? Your Case Can Be Dismissed

If you fall behind on Chapter 13 payments, your Chapter 13 may be dismissed.  If the court dismisses your case, then your Chapter 13 will be “over.”   You will be forced to look into other options.

The Chapter 13 trustee usually brings a motion to dismiss a Chapter 13 case when the payments are 2-3 months behind.   Once a trustee files a motion to dismiss, your attorney will have a chance to object to this motion.   During this objection process, you may be given the chance to make up your behind payments.   If you can make up your behind payments in time, the trustee will drop the motion to dismiss your case.

Falling Behind May Cause Your Case to Require a Motion to Modify your Chapter 13 Plan

Sometimes it may not be possible to come up to date on your Chapter 13 payments very quickly.  In such cases, it may be possible for your attorney to modify your Chapter 13 case.   Your attorney can change the terms of the plan by filing a motion to modify your Chapter 13.    Under the new Chapter 13 plan terms (if accepted by the court), you would then be back up-to-date on payments.

In some cases, it may not be possible to modify a Chapter 13 plan.  Other times the new payments under the modification will be too high to afford under the current budget.  Chapter 13 plans must follow rigid standards for the repayment of debt as outlined by the bankruptcy code.  The standards of the bankruptcy code limit how far (and how many times) a Chapter 13 plan can be modified.

Falling Behind May Force You to Consider Other Options

Sometimes falling behind on payments simply means one thing: the Chapter 13 plan is failing.  If you fall behind on payments in Chapter 13, it may force you to consider other options.   For instance, if you were attempting to bring your mortgage up-to-date in Chapter 13, then you may want to instead pursue a loan modification when the Chapter 13 payments start to fail.    Other times a conversion of your case to Chapter 7 may be in order.   Chapter 7 does not require plan payments and can sometimes eliminate a large amount of debt much easier.  In other cases, sometimes a tax settlement or the settlement of other debts may also be a viable option besides Chapter 13.

 

 

 

Montgomery County Indiana Bankruptcy Attorney: Knowing the Facts

Knowing the facts about bankruptcy and attorneys in Montgomery County Indiana may seem a strange topic to research.  The beauty and rich history of Montgomery County could easily distract many people from such mundane facts.    From the winding Sugar Creek, to the parks, to historic downtown Crawfordsville: it’s perfectly Indiana.  Even the movie “Hoosiers” was filmed largely in Montgomery County, featuring New Richmond as the “Hickory” Indiana of yesteryear.  However, Montgomery County is perfectly the prototypically Indiana “scene.”  Examining Montgomery County can help one understand bankruptcy throughout the whole state of Indiana.

How Many Bankruptcies are Filed in Montgomery County Indiana Each Year?

An average of 180 bankruptcy cases are filed in Montgomery County each year. Recently, bankruptcies have been slightly in decline in Montgomery County.   This decline in Montgomery County bankruptcy filings is only following, however, the general U.S. trend of the last few years towards a decline of total bankruptcy filings.  Most bankruptcy cases (over 70%) filed in Montgomery County are Chapter 7 with the majority of the rest filed under Chapter 13. Below is listed the total bankruptcy filings for Montgomery County for the last 8 years:

  • 2008 – 170 total filings
  • 2009 – 210 total filings
  • 2010 – 235 total filings
  • 2011 – 180 total filings
  • 2012 – 180 total filings
  • 2013 – 137 total filings
  • 2014 –  90 total filings
  • 2015 – 120 total filings
  • 2016 – 89 total filings (note: 2016 amount predicted)

Why are Bankruptcy Cases not Handled through the Montgomery County Indiana Courthouse?

Bankruptcy is a Federal matter which means that you must ask for your bankruptcy relief through a Federal Court.   The closest (and the appropriate) federal court where you can ask for bankruptcy relief is the Indiana Southern District Bankruptcy Court in Indianapolis.  All people that live in Montgomery County Indiana must file for bankruptcy relief through this court that is located in Indianapolis.

Does that mean I have to go to Indianapolis to find a Bankruptcy Attorney?

You do not need to seek an attorney that is located in Indianapolis.  Any Indiana attorney that is admitted to practice in the Indiana’s Southern Federal District is capable of filing for bankruptcy relief and represent a client in bankruptcy.  This basically means that you can use most bankruptcy attorneys throughout Indiana.

However, there may be some advantage of searching for bankruptcy attorney that is located closer to Indianapolis.  Most higher-volume, experienced bankruptcy attorneys are located closer to Indianapolis because of the larger market for bankruptcy there.   If you seek an attorney closer to to Indianapolis, you may find more options and possibly lower attorney fees for filing your case.

Our Bankruptcy Office’s Experience Working with Montgomery County Residents

We have always helped a great number of Montgomery County residents file for bankruptcy over the years.   We are very familiar with the area. People from Montgomery County like our office because it is easy to get to from I-74.  They also love our office because of the relaxed, country, Montgomery-County-like setting.   Let us know if you have any questions about getting out of debt.

Crawfordsville Indiana Bankruptcy Office Town Pictures

Because of our close proximity off of I-74, we serve people from Crawfordsville all the time. We offer very affordable fees and a very friendly staff to help you get through your financial troubles.

 

 

Bankruptcy and Inheritance in Indiana

Inheritance and Bankruptcy

In Indiana, we receive a lot of questions about Inheritance and Bankruptcy.   Many of our clients have asked, “Can I lose my upcoming inheritance if I file for bankruptcy?”   The answer to this questions can sometimes be “Yes.”   Therefore, it is very important to understand WHEN you can lose your inheritance if you file for bankruptcy.

Chapter 7 Bankruptcy and Inheritance

First, let’s discuss when you could lose your inheritance by filing for Chapter 7 bankruptcy.  Generally, all assets that you own, including currently due inheritances, are included in your bankruptcy.   Therefore, if you are owed an inheritance (because someone has already died), you could lose it in your Chapter 7 bankruptcy to pay back creditors.   If the person has already died (or already transferred you the property), you legally own the inheritance.  It will be taken in the Chapter 7 bankruptcy unless it is protected by a bankruptcy exemption.

What about if you have a family member that dies and leaves you an inheritance right after you filed for bankruptcy?  These situations – where someone dies and leaves you an inheritance after you filed for bankruptcy – are controlled by a simple rule.   If anyone dies within six months of filing for Chapter 7 bankruptcy and leaves you an inheritance, it becomes part of the bankruptcy.   If they die within six months of you filing, you could lose your inheritance.

Chapter 13 Bankruptcy and Inheritance

When you file for Chapter 13 bankruptcy, you are required to turn over your income and other sources of money toward a repayment plan that lasts usually 3 to 5 years.   Any time during this repayment plan, you could be required to turn over part or the entirety of any inheritance received in order to pay back your creditors.  The inheritance amount that you receive could increase the amount that you must pay towards all your creditors.

Conclusion: Talk to An Attorney

Because of the danger of losing an inheritance during bankruptcy, you should consult an Indiana bankruptcy attorney.   An attorney can help you formulate a plan to get relief from your debts.   If you must file bankruptcy, only an attorney can properly guide you whether it is better to file bankruptcy before or after your receive your inheritance.

 

Marion County Sheriff Sale: Understanding and Stopping the Sale

A Marion County sheriff sale can be a cause of great alarm.  If you do not want to lose your house in a sheriff sale, then you need to know some important information about how sheriff sales work.  We will discuss how Marion County Indiana sheriff sales work and how they can be stopped.

Marion County Sheriff Sale

Understanding the Process of Sheriff Sales

In Marion County, Indiana, sheriff sales are conducted every month at the City-County building.   If your home goes through this sheriff sale, you will lose all rights to your property.  Essentially, you will no longer be the owner of the property: the bank or the new buyer will be the owner.  You could be ejected immediately from the property if you remain there after the sheriff sale.  Or, in some cases, the new owner may be forced to go through an eviction process to remove you from the property.  Therefore, it is very important to have a plan to prevent a sheriff sale from occurring if you want to retain your property.

These Indiana Marion County sheriff sales usually only are scheduled after a mortgage foreclosure judgment is obtained.   (Marion County sheriff sales could be scheduled outside a mortgage foreclosure situation but it is rare). You should receive notice of both the original foreclosure action and then the eventual scheduling of the sheriff sale.  Your notice of sheriff sale will likely come in folded thick paper that outlines the time and date that the sale will occur.  You will usually have approximately 45 days notice.

If you did not receive notice but suspect that your home is scheduled for sheriff sale, you can obtain a list of scheduled Marion County sheriff sales.  You can obtain this list through calling the Civil Office Real Estate Office by calling (317) 327-2450.  You can also obtain this list in person during weekly business hours by going to the City County building on Washington Street and going to room 1122 on the 11th floor.  This list can also be obtained by a small fee through the following site: http://www.indy.gov/egov/county/MCSD/services/realestate/pages/forms.aspx

Keep in mind that you should have already received notice of both the original mortgage foreclosure and the sheriff sale.  If you have the Marion County Civil court case number, you can also look up the information by going the Marion County Clerk’s Office or by using the My Case search system that is available at the following link: http://mycase.in.gov  Remember, that Indiana’s state court system is transitioning into an online search system.  Therefore, some information on certain cases may not be available.

Stopping the Sheriff Sale

Stopping a Marion County sheriff sale takes a very powerful operation of law.   Essentially, there are two mainstream ways of stopping a sheriff sale: 1) Convincing your mortgage lender to cancel the sale and 2) filing for bankruptcy.  Let’s discuss these two options.

Stopping the Sale by Convincing the Mortgage Lender

First, a very uncertain but potentially valuable way for cancelling a sheriff sale is to convince the  mortgage company to cancel it. If you can work out a loan modification or forbearance agreement, you may be able to convince the mortgage company to cancel the sale.  You could also seek a remedy at the state court level to cancel the sale, but this option is very limited and not likely to succeed.   This attempt to cancel a sheriff sale outside of bankruptcy is very limited and unpredictable.  Although it can be attempted if you desire to save your home, two things must be stressed.  First, if you are already at the sheriff sale stage, it may be too late.  You should have probably finished working something out with the mortgage company months ago before the sale date was set.   Second, you should probably have a bankruptcy back up plan if this first option does not work.

Stopping the Sale through Bankruptcy

Bankruptcy – whether Chapter 7 or Chapter 13 – is the most cost effective and powerful way usually of canceling a sheriff sale.  Bankruptcy also can help you take care of other burdensome debts.   At the moment a bankruptcy case is filed, all collection activity immediately is stopped.  This includes any scheduled sheriff sale.

In Chapter 7, the Marion County sheriff sale will be cancelled only temporarily.  You will usually have 3-5 more months (or more) to work something out with the lender such as a loan modification.   At the close of the Chapter 7 bankruptcy, all of your debt will be forgiven (except for a few exceptions).  Remember, however, that Chapter 7 has no mechanism for bringing the house up-to-date with the mortgage company.  After your Chapter 7, you would not have a built-in plan to get into good standings again with your mortgage company.  If you do nothing, eventually another sheriff sale will be set for your property.

In Chapter 13, the Indiana Marion County sheriff sale will be cancelled permanently if you desire.  This is because the Chapter 13 has a built-in mechanism for bringing you back into good standing with the mortgage company.  You can pay your normal mortgage payment and any arrears (portion you are behind on) through the Chapter 13 plan.  You will not have to bring your house back up to date in one lump sum.  Instead, through monthly payments, you pay your normal mortgage payment, your arrears, and any other debts trough the Chapter 13 plan.   If you enter Chapter 13, your sheriff sale will be permanently cancelled if you choose to reorganize the house situation through the plan.

Conclusion: Marion County Sheriff Sales Need Immediate Attention

If you are scheduled for a Marion County Sheriff sale, it is important that you seek a bankruptcy attorney immediately.  If you desire to keep the property, it is vitally important that you arrange your bankruptcy case to be filed BEFORE the sheriff sale occurs.  If you have receive a Marion County (or any other Indiana County) sheriff sale notice, contact our office immediately for a free consultation.