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Refiling Bankruptcy in Indiana

When Can I Consider Refiling bankruptcy in Indiana?

Refiling Bankruptcy in Indiana

Thinking about refiling bankruptcy in Indiana? Many people in Indiana find themselves needing to refile for bankruptcy.  Do not be worried. You are not alone! Indiana people frequently refile for bankruptcy.   If you need to file bankruptcy again, you almost certainly will be able to file a new bankruptcy case in some way immediately.   Understanding what type of bankruptcy you can file will be important for the planning you will need to do with your bankruptcy attorney.

Chapter 7 to Chapter 7 – Indiana Refiling Wait Time

You can usually file for Chapter 7 every eight years.  Therefore, you need to wait until 8 years have passed from the last date you filed for bankruptcy.  You do not need, however, to wait for the full 8 years. You can usually just file for Chapter 13 right now instead, no matter how much time has passed.  Filing Chapter 13 could be a much better option than waiting for Chapter 7, and it usually does not cost very much to get the case started.

Refiling Chapter 13 in Indiana

Chapter 13 can usually be filed at any time as long as there is currently not another bankruptcy case active and open in Indiana.  There are some restrictions, however, to when you can get a discharge at the end of the case when you have recently filed a Chapter 7 beforehand.  However, you can almost always refile a Chapter 13 and get it filed very quickly. 

Chapter 13 can be a powerful way to deal with debt that is always available to most filers.  Almost all people who have previously filed for bankruptcy can file for Chapter 13 at any time thereafter.  They will have the protection of the court from creditors for the entire time their payment plan is operating.   

The one exception that can cause problems is a person who has had multiple Chapter 13’s that have all been dismissed in the last couple of years.  In situations like these, creditors will sometimes object due to the rapid, multiple filings. The court may also limit the amount of protection a debtor will receive from creditors in such a multiple-filing scenario.

Debt Collectors Calling After Bankruptcy

Debt Collectors Calling after bankruptcy -List of Creditors

Debt collectors should not be able to call after bankruptcy.  Debt collectors who continue to call after bankruptcy are in direct violation of the bankruptcy code.  You have powerful options to shut the creditor down and even receive money for damages.

Debt Collectors Cannot Violate the “Discharge”

If you had a debt listed in your bankruptcy, it is usually discharged when your case concludes.   Any debt that is “discharged” can never be collected against ever again. Your debt collectors cannot call or collect after this discharge order permanently eliminates your debt.

Collectors that do not comply can be sued in bankruptcy court.  A separate action can be opened in your old bankruptcy case called an “adversary.”  This is simply a lawsuit in Federal Court that is connected to your old bankruptcy. In this adversary case, your attorney can seek damages for every single violation of the discharge.  For instance, if the collector has called or visited your house several times, you may be able to seek a fine for every time they moved against you.

What To Do If Collectors are Calling You After Bankruptcy

First, you need to notify the creditor of your bankruptcy.  Sometimes this is all you need to do. Make sure to give them the case number and any other identifying information such as the date you filed. 

Second, you may want to call your bankruptcy attorney.  It may be wise to double-check that this particular creditor appeared in your bankruptcy schedules.  If they are not in your bankruptcy schedules, then it is likely that the creditor was never informed.  You may need to officially add them to the bankruptcy or simply have your attorney give them notice, depending on the situation.  

Third, if the collection becomes severe or does not stop, you should ask your attorney about finding counsel to bring a lawsuit.  Certain bankruptcy attorneys will commonly bring claims against over-aggressive creditors such as these. Either your bankruptcy attorney will bring the lawsuit or your attorney can likely refer you to another attorney in the area that frequently brings such lawsuits.  Remember, this is only for the most severe cases. Usually, simply informing the creditor of the bankruptcy and demanding them to stop is all that needs to take place to correct the problem.

Debts Sold to Collection Agency

Debts Sold to Collection Agency

Debts are frequently sold to a collection agency.  Having your debt held by a collection agency can be a much worse position than just owing to the original creditor.  Understanding how debts are sold to a collection agency can greatly increase your credit-related knowledge. It will also help you understand how debts are collected.

Concepts Related to Collection Agencies

Collections concepts and terms are sometimes misunderstood.  For instance, most people believe that “charged off” is a good term on credit similar to the term “written off.”   “Charged off” is actually a bad term usually: it generally means that you may now have to deal with a collection agency.  The original creditor believes that your balance is now a “bad debt.” They will then simply transfer it to a more aggressive collection department or even sell it directly to a collection agency. 

Another concept that is important to understand is “transferring of a claim.”  In our modern society, debts can actually be sold or transferred to any party.   Essentially, the original creditor can just sell their right to the money owed. This includes the right for the new party to sue you for the debt.  Collection agencies will frequently have claims transferred to them to pursue in collection. They are experts only in the realm of debt collection, even suing sometimes 100’s of people at one time.

When Debts are Sold Things Get Much Worse

When your debt is sold to a collection agency, things usually get much worse.   First, the new company does not simply keep large books for people who owe money.  Instead, they aggressively attack with collection letters, calls, and other forms of collection.  These can be very difficult to overcome, usually forcing the person into settling the debt, getting garnished, or eventually filing for bankruptcy. 

Secondly, some debts will now start appearing negatively on your credit report.  Certain debts such as medical or locally-based debts usually do not even appear on your credit report until they go to a collection agency.  This can take an otherwise good credit score down quickly when negative information begins appearing on the credit report. 

Lastly, debts sold to a collection agency can result in massive, dead-end lawsuits.   For instance, if a mortgage company forecloses on a house, there can sometimes be a large debt that floats around out there for several years against mortgage holder(s).  Similarly, large or even astronomical medical debts can float out there for many years, never settled. When these debts go to collection agencies, sometimes the new creditor will immediately sue for $100,000 or whatever other large amount just to force the issue.   Those who owe the money will not have a choice. Bold action will then need to be taken to counter the situation with a settlement or a bankruptcy filing.

Back Rent and Bankruptcy

Back Rent and Bankruptcy

Depending on your situation, bankruptcy can affect the amount of back rent you owe in different ways.  It can sometimes be completely discharged through bankruptcy and go away forever with the rest of your debts.  Other times, the bankruptcy case may have very little effect on your situation.  Understanding back rent and bankruptcy can help you know what you will be up against when you file your bankruptcy case.

Back Rent Can Be Completely Forgiven in Bankruptcy

If you plan to completely sever ties with your current landlord, unpaid rent amounts will usually go away with the bankruptcy.  This usually happens when you have already moved out of the property.   It also happens when you “reject” your lease during the bankruptcy.  

A lease “rejection” simply means that you are no longer going to continue with the housing contract.  You are essentially “rejecting” the lease and adding it to your bankruptcy.   When you reject a lease, you will need to make arrangements with your landlord to move out quickly, usually within the next 2-3 months or sooner.  If you do not move out timely, the landlord could lift the bankruptcy’s protective stay and evict you from the property.   However, generally, any back rent that you owe will be added into the bankruptcy and the lease will be terminated. 

Unpaid Rent Can Remain After Bankruptcy

Many people falsely believe that they can file bankruptcy on their back rent and just continue as usual with their housing lease.  This is incorrect.  Back rent amounts remain the same if you want to stay in your lease.  If you want to keep living in the same place, you will usually need to come back up to date on your rent.   

Even though you have filed bankruptcy, your lease terms generally stay the same.  This essentially means that any back rent you owe will stay the same if you want to keep living in the same property.   The landlord can still evict you even if you are not “personally” liable on the lease any more through the bankruptcy.  You will likely be evicted if you do not go back and catch up on your rent.       

Indiana Home Values and Bankruptcy

Indiana Home Values and Bankruptcy

Indiana home values are surging even at higher amounts generally than the rest of the nation.  These home values increasing usually do not slow down the volume of Indiana bankruptcies filed.  In fact, sometimes the increase in value can cause more bankruptcy. With Indiana home values on the rise, Hoosiers will also be faced with unique situations when they file for bankruptcy.

Hoosier Home Values Drive Higher Amounts of Bankruptcy

With more bankruptcy cases on the rise, defaults on mortgage payments will also start to occur.  More and more Indiana residents will face mortgage foreclosure. This also creates a “domino” effect that will lead to even more bankruptcy filings.

Indiana Home Values will Also Not Be Fully Protected in Bankruptcy

Even more concerning is the fact that many Indiana home values will not be “safe” in Chapter 7 bankruptcy because of their elevated status.  Homes that were bought only 4-5 years ago will frequently now have $50,000 or even $100,000 more sale value. In Indiana, the exemption (protection) in Chapter 7 for residence equity is only $19,300 per person.  This could be wholly inadequate to protect Indiana residents that are now facing a higher home value. They could be forced into a Chapter 13 repayment plan or to settle with the Chapter 7 trustee in order to keep their house. 

Hoosier Home Values Could Be Headed for a Crash

The worst aspect of rising Indiana home values is the fear that eventually a market correction or crash could be coming.  In 2008, the real estate crash caused record new numbers for bankruptcy under the new 2005 Bankruptcy Code. It is very possible that a major mortgage default and market crash could eventually happen again.  This can be a worse-case Indiana-bankruptcy scenario. If this happens, many people could also ultimately lose their jobs as the entire economy suffers. Rising home values can be a blessing that can quickly change into a curse.  It can be a great way to gain equity and savings, but can also cause crashes if the market elevates too quickly.

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