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Indiana Chapter 7 vs Indiana Chapter 13 Bankruptcy

John Bymaster discusses Chapter 7 vs 13

This article compares the benefits of Chapter 7 bankruptcy in Indiana versus Chapter 13 bankruptcy. Both Chapter 7 and Chapter 13 can be a cost effective and powerful solution to your debt problems if you live in Indiana. Let’s discuss the differences between the two.

Chapter 7 Bankruptcy in Indiana

The most common bankruptcy remedy that our office helps people file and the greater Indianapolis area is Chapter 7 bankruptcy. Chapter 7 bankruptcy is the total elimination or “discharge” of your debts. Chapter 7 is so powerful because of the speed in which all of your debt are erased. It is the fastest way to achieve a fresh start and to get back moving in a good financial direction.

Chapter 7 bankruptcy in Indiana can also help you rebuild your credit quickly. If you have bad credit, your credit history and rating improve almost instantly upon filing Chapter 7 bankruptcy. This is because all of your bad past credit history is instantly replaced with a single entry of the date and place in which you filed the Chapter 7 bankruptcy. You will almost instantly receive credit offers in the mail for items such as automobile loans or possibly smaller balance credit cards. After two years, you will likely be able to rebuild your credit a considerable degree if you continue on making timely payments in credit accounts.

Remember, if you file Chapter 7 bankruptcy and want to keep your house and cars you will need to continue making those payments. However, all of your debts are discharged in Chapter 7 bankruptcy. That means that you will no longer be personally liable for any of your debts. Remember also that certain debts cannot be discharged in Chapter 7 bankruptcy such as recent income tax debt, child support, or student loans.

Chapter 13 Bankruptcy in Indiana

A Chapter 13 bankruptcy in Indiana is much different than Chapter 7 because it is a 3 to 5 year repayment plan that reorganizes your debts. Chapter 13 is a much different approach to debt relief than chapter 7. Instead of focusing on your assets and then discharging all of your debts like in Chapter 7, the Chapter 13 case focuses on what you are able to repay to your creditors.

Chapter 13 possesses many attributes that a simple Chapter 7 case lacks in its simplicity. Chapter 13, unlike Chapter 7, can be used as a versatile tool of debt reorganization. Chapter 13 cases are used to bring mortgages up-to-date and repay arrears. They can also bring automobiles up to date and sometimes drastically change the terms of repayment for the automobile. Chapter 13’s can also be used to avoid second and third mortgages in certain situations.

Chapter 13 cases are also used to achieve debt relief when you have either too much income or too many assets to file under Chapter 7. In addition, some Chapter 13 filers use their case to keep creditors satisfied with a lower, single payment – something much better and more organized than what could be achieved outside of bankruptcy. With almost all Chapter 13 filers, the Chapter 13 case is also used to stop aggressive collection or communication with creditors during the duration of their plan.

Conclusion: Chapter 7 and Chapter 13 are Both Powerful and Cost-Effective Ways to Deal With Excessive Debt

Although Chapter 7 and Chapter 13 approach debt relief in quite a different way, both types of filings are very powerful ways of dealing with excessive debt. Chapter 7 is simple: it quickly eliminates all dischargeable debts. Chapter 13 is somewhat more complex but much more versatile: it offers a variety of mechanisms that can reorganize your debts.

~Indianapolis Bankruptcy Attorney John Bymaster on Indiana Chapter 7 vs Indiana Chapter 13 Bankruptcy

 

 

 

 

Post-Bankruptcy Debtors Financial Management Course: Top 5 Things to Know

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Post-Bankruptcy Debtors Financial Management Course –Every person in Chapter 7 or Chapter 13 bankruptcy is required to take a post bankruptcy debtors financial management course. This course helps teach financial principles for making a budget and making sure that you will be able to manage your finances after bankruptcy. This article is about the top five things to know about the post bankruptcy debtors financial management course.

1.  Post Bankruptcy Debtors Financial Management Course Top Things to Know 

You are required to take this second class after the bankruptcy case is filed but before you receive your discharge in your case. Every person that files Chapter 7 Chapter 13 bankruptcy case must take this second, “post” bankruptcy class after the bankruptcy case is filed. You will be required to provide your bankruptcy case number before taking the second bankruptcy class on financial management in order to prove that your bankruptcy case has already been filed. It is best to take this second bankruptcy class right after your bankruptcy case is filed. The last possible time you will have to take the class is right before your discharge, but do not wait that late to take it!

2.  Post Bankruptcy Debtors Financial Management Course Top Things to Know 

Do not forget to take the second class or take it too late. If you do not take your second bankruptcy class on financial management before you receive the discharge in your bankruptcy case, it will be closed without a discharge. The court will require a large reopening fee to reopen your case. Do not make a $300 mistake. Take your second bankruptcy class early, right after your bankruptcy case is filed.

 3.  Post Bankruptcy Debtors Financial Management Course Top Things to Know 

This class is about managing your finances in the future after the bankruptcy.  Congress felt that it was necessary to require the second bankruptcy class in order to teach financial management to those who have filed for bankruptcy relief. Many debtors get into bankruptcy situations because they do not understand proper and effective financial management. This class was a minimal effort by Congress to at least teach basic financial principles to those who have found it necessary to file for bankruptcy.

4.  Post Bankruptcy Debtors Financial Management Course Top Things to Know 

The class is very affordable. Although there are a variety of providers of the second bankruptcy class, almost all of them now are very affordable. Many providers charge as little as $8 to $15 for the second required class. Some providers may provide additional information in a better to understand format that gives you better financial training. These classes may cost a little bit more than the lower end of the spectrum but usually do not exceed $50.

5.  Post Bankruptcy Debtors Financial Management Course Top Things to Know 

Keep getting financial education even after you take the second course. The value of financial knowledge cannot be overstated. Acquiring financial knowledge and living by it can completely change your life forever. If you make it your mission to acquire and live by financial understanding, then your life will truly get the fresh start that you need.

Conclusion

The post bankruptcy financial management class can be a powerful beginning to new financial understanding. After you file bankruptcy, you truly have a fresh start. However, it’s up to you what you would do with that fresh start. Use the post bankruptcy financial management class to kick off a new life of financial responsibility and learning. This is what Congress intended by requiring people to take this course: a life that is much better now because of new financial understanding.

~Indianapolis Bankruptcy Attorney John F. Bymaster