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Can I file for bankruptcy in Indiana if I recently moved here?

If you have only recently moved to Indiana, you can still file bankruptcy within the state of Indiana. You do not generally need to go back to your old state to file.  This can be very convenient and cut down of traveling costs.

Indiana Bankruptcy Filing:  You Must Wait 91 Days (The Greater Part of 180 Days)

The bankruptcy code officially states that bankruptcy filers that want to file in their new state must wait “the greater part of 180 days.”  Therefore, in most situations, you must live within your new state for 91 days to file there.  If you have lived in Indiana more than 91 days, you will be able to file in Indiana for bankruptcy.  This can be much more convenient than traveling back to your old state.  It may save you the cost of an airline ticket if your state is too far away to drive.

Indiana Bankruptcy Filing: The Bankruptcy Court Understands You Need a Jurisdiction Where You Can File

The bankruptcy court understand that everyone needs a jurisdiction to file bankruptcy. The court desires bankruptcy relief to be readily available for those who need it. Generally, there is not an excessive analysis of the proper jurisdiction in which you must file bankruptcy.  Therefore, generally extensive proof of residency within a state is not required. If you live in multiple states, generally it is best to pick the state in which you spend the most time throughout the year.  

Indiana Bankruptcy Filing:  Your Bankruptcy Exemptions Do Not Change as Quickly

If you move to a new state, you may be able to file there quickly. However, your bankruptcy exemptions  will usually not change for two years.  The bankruptcy court will allow you to file in the new state in only 91 days.  The court does not, however, allow “exemption shopping” where people move to a new state just to avail themselves of more liberal bankruptcy exemptions to protect their property.  In Indiana just like all other states, you must wait two years before you can avail yourself of the new state’s exemptions. 

Will My Home Be Searched When Filing Bankruptcy?

Many people fear that a bankruptcy trustee will search their house or apartment during bankruptcy.  Many believe that a cataloging of property or an auction takes place during every bankruptcy case.  In reality, these things virtually never happen in bankruptcy.  In Indiana, no search or other intrusion into your household is likely to happen during bankruptcy.   This article explains why such personal intrusions are uncommon and unnecessary in most bankruptcy cases.

The Petition Already Lists All Property

Your petition for bankruptcy already lists all of your property and financial information.  When you file for bankruptcy, you sign under penalty of perjury that all the information is correct.  In addition, certain verifying documents are required to be presented to the bankruptcy court and trustee.   The trustee can review these documents and do their own due diligence searches if they desire.  With all this information at hand, it is rare that the trustee will need to do any personal examination of your property.

Indiana Bankruptcy Exemptions Protect Most People’s Property

In Indiana, the bankruptcy exemptions protect the vast majority of bankruptcy filer’s property in entirety.  Using these exemptions, you were allowed to keep over $10,000 of personal property per filer.  You are also allowed to keep almost $20,000 in residential real estate per filer.   This protects the vast majority of property held on most cases. It also makes excessive searches of property completely unnecessary.

The Trustee Will Not Do Anything That Does Not Benefit the Creditors

Excessive searches or research almost never proves to produce any more funds for creditors in bankruptcy.  Therefore, the  trustee will not waste their resources on such unnecessary matters.  In addition, the bankruptcy system is designed to be efficient and effective. Such searches or intrusions would be over burdensome and undesirable within the bankruptcy system.  Although the trustee has wide latitude in researching and cataloging assets, such actions are only necessary and a very limited amount of high asset Bankruptcy cases.

What Happens if I Default On My Credit Card Debt?

What happens if you default on your credit card debt?Credit card balances can increase in size easily.  The monthly payments can quickly become impossible to pay.   What happens if you are forced to default on your credit cards?  There are a few important things to know about what happens after you begin to default on your credit cards.

Your Rates Will Go Up

If you default on a monthly credit card payment, your interest rate will likely increase.  This can double or even triple your new minimum monthly payment.  Many credit cards offer low interest rates such as 8% or less.  These rates will increase to rates as high as 15% or even higher than 20% if you begin to default on your payments.

You Will Be Charged Late Fees

Most credit card payments charge late fees.  For the first offense, it is very common to charge $27 for being late.  Future offenses may increase the monthly late fee to as much as $38. These late fees coupled with higher interest rates can make credit card payments very difficult.   If you are planning to default on your credit cards, you may need to make a plan to get rid of your debts.  You may need to settle your credit card debts or file for bankruptcy.

Your Credit Score Will Decline

Another consequence of defaulting on credit cards is the lowering of your credit score.  Your credit score is determined by a carefully calculated system that takes into account the timeliness of your credit payments.  Any missed payments will very quickly effect your overall credit score.  This can prevent you from obtaining loans or other credit items due to concerns that you may be forced to default on all of your debt.

Default on Credit Cards Can Sometimes Be A Good Thing

If you have excessive credit cards or other debts, it may be a good thing to default on your credit cards if you do not have any other options.  Credit cards are “unsecured debts” which means that you will not generally lose a house, car, or other item if you stop paying on the debt.   In some situations, it is good to stop paying credit cards first as opposed to your mortgage or car payment.  If you are forced to default on your credit cards, you need to talk to a bankruptcy attorney as soon as possible.   An attorney can guide you through the bankruptcy process, the settlement of your debts, or some other debt relief option.

How Much Interest is Allowed on a Loan in Indiana?

In Indiana, loans are generally capped at a maximum interest rate.  Under new legislation, most loans under $50,000 are only allowed a maximum of 21% interest.  However, higher or lower maximum interest rates are allowed in various situations.

Loans Under $50,000 Are Now Capped at 21%

In Indiana, new legislation capped the maximum interest rate for loans under $50,000 at 21%.  Generally, loans in the past in Indiana were also capped for the most part at under 25% under general usury legal concepts.  Only recently have these 21% restrictions come into place.  It also applies only to loans under $50,000 only.

Various Types of Loans Still Greatly Exceed Interests Caps in Indiana

Payday loans and online loans can still greatly exceed the 21% maximum in practical operation.  These loans are non-conventional and high interest-rate. Many providers of these loans are even located outside of the United States.  With penalties, restrictions, and other harsh terms, you may end up paying a much higher interest rate than what may be generally considered legal or acceptable in Indiana.

The 10% Judgment Rate Maximum

If you receive a lawsuit that goes to judgment, you will be required to pay interest on the judgment amount.  Generally in Indiana, the maximum you will be charged on judgment interest is 10%.  For general purposes, Indiana considers 10% interest to be a fair and equitable rate.   

Indiana’s interest rate for judgments can also help you evaluate how good of an interest rate you are receiving on a personal loan.  If you are seeking a personal loan, a rate in excess of 10% could be logically considered a high interest rate.  A rate under 10% could be considered a lower, more desirable interest rate.

Can One Spouse File for Bankruptcy?

Image illustrating bankruptcy exemptions

Sometimes a married couple may not be equally burdened with debts.  Most or all of the marital debts may only be in one spouse’s name in some situations.  Although married couples usually file together in bankruptcy, sometimes it can be advantageous for only one spouse to file for bankruptcy.

How Much Debt Can Decide Who Files 

If one spouse has much less debt, then you may want to consider whether that spouse needs to file for bankruptcy.  If it is possible to get the other spouse out of debt within 1 to 2 years, then it be advantageous for that spouse to stay out of the bankruptcy.  However, bankruptcy is the perfect time to deal with debts in their entirety.  It does not cost additional amounts usually if you add both spouses onto a single bankruptcy. Careful consideration with a bankruptcy attorney should always take place if a debt-laden spouse desires to not file bankruptcy.

Medical Debts May Require Special Consideration in Indiana

Medical debts can sometimes be collectible against both spouses in Indiana.  Even if only one spouse is listed on the debt, medical bills are sometimes collectible against the other spouse. If only one spouse files for bankruptcy, it is possible that medical creditors could attend collection on the other spouse even after the bankruptcy.  

The medical debts are required to have occurred during the marriage in order to potentially collect against the spouse.  If the medical debts were incurred before the marriage, then it is highly unlikely in Indiana that the current spouse will be found liable for collection.  Also, collection against spouses may not always occur with every medical debt.   Many times the medical debts are simply written off after the notice of the bankruptcy without any further attempt to collect against a potentially liable spouse.

Ultimately Seek Your Bankruptcy Attorney’s Advice

Your attorney will likely know better than anybody else whether both spouses should file for bankruptcy.  Your attorney will likely be familiar with the difficulties of repaying debt.  Upon request, your attorney can review the advantages and disadvantage of having only one spouse file for bankruptcy.

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