Bymaster

AVOIDING BANKRUPTCY IN INDIANA

Avoiding bankruptcy in Indiana can be accomplished many times through financial education and responsible, conservative living.   However, no level of planning can be a “bullet-proof,”  100% guarantee that the necessity for bankruptcy will never arise in life.  Therefore, this article will address two parts that we encourage everyone in Indiana to think about in their own lives: 1) Avoiding Bankruptcy and 2) Planning just in case the need for bankruptcy relief ever unexpectedly arises.

 PART ONE: AVOIDING BANKRUPTCY THROUGH FINANCIAL EDUCATION AND RESPONSIBLE LIVING

The best way to avoid bankruptcy is to learn as much as possible about basic financial principles and then ACTUALLY FOLLOW WHAT YOU ARE SUPPOSED TO DO!    We have all learned to some degree horrible and non-functional financial habits from our credit-based society, lack of financial education in schools, and lack of financial understanding inherited through our friends and family.   All those bad habits and faulty concepts (including greed, impatience, insecurity, and feelings of ineptitude) need to be ejected from our mind and replaced with sound, real-life financial realities.

Many people worry and complain about what they do not have: this is what causes them to take credit “short-cuts” to falsely achieve what they were unable to achieve through long-term financial responsibility.   The real fact is that nobody cares about the appearances of what you own except for you.  The question, “How to avoid Bankruptcy in Indiana?” can be answered simply: do not care about what everybody else in Indiana is doing or what they think.

“Keeping up appearances” is what causes many people to fall into bankruptcy.   I like how Zig Ziglar says to “be grateful for what you have and stop complaining – it bores everybody else, does you no good, and doesn’t solve any problems.”   In fact, trying “to have” before financial responsibility naturally delivers rightfully-bestowed possessions will create NUMEROUS problems.  One of these problems can many times be the need for bankruptcy.

The best advice: ignore what everybody else you know is doing.  If they are buying a $250,000 house, you make a plan to own a $85,000 house paid-in-full in 3 years.   If they are buying a new car, you go out and buy 3 used cars for $400 a piece.  If their goal is to get the most expensive, nice apartment they can find, you go out a find an apartment for $250 per month that is almost as nice as the one they pay $1500 per month to rent.   Impossible you say?   How do you know until you make it your number one goal and get the financial education and research behind it to make it happen?

 PART TWO OF AVOIDING BANKRUPTCY: PLANNING JUST IN CASE THE NEED FOR BANKRUPTCY EVER COMES

No amount of planning can perfectly insulate you from the uncertainty of life.  Therefore, it is very important also to plan for bankruptcy just in case the need for such relief ever comes.   How to avoid bankruptcy is perhaps not as important as how to avoid bankruptcy’s damage or disruption to your financial life.

Bankruptcy planning is a topic that could encompass hundreds of articles.  We will, therefore, keep this discussion very simple here.   When planning for the unexpected, it is important to realize that certain assets are protected from bankruptcy such as retirement accounts, your basic Indiana real estate and personal property exemptions, and other items.   If you have taken the time to become financial responsible and prosperous, it would be VERY WISE to diversify your possessions to include at least some substantial IRA, 401k, or other exempt items in case the need for bankruptcy ever arises.

If you are a contactor, own a business, or do any other form of transactions that can open you up to a greater level of potential liability, it is even more important to do good life planning to protect yourself from the unexpected.  If you are open to certain liabilities, perhaps your home should be purchased by your spouse or your home held as a “tenancy in entirety” in Indiana.   Also, 401k and IRA savings are even more important in such situations.  Remember, the entire point of this section of the article is only to alert you to the NEED for bankruptcy planning.   Any advice should only be sought through consultation with an Indiana or Indianapolis area accountant or a bankruptcy attorney.

 CONCLUSION: AVOID BANKRUPTCY BUT PLAN FOR THE WORST

With proper financial planning and education, how to avoid bankruptcy will become evident: a lifetime of financial success and responsibility.   However, because life is NEVER fully predictable, it would be very wise to make a financial plan that will insulate you to some extent even from the dangers of a worst case financial scenario such as bankruptcy.   The old admonition “Plan for the best, Prepare for the Worst” has always been good advice!

Indianapolis Bankruptcy Attorney John F. Bymaster on Avoiding Bankruptcy