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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!

AVOIDING BANKRUPTCY IN INDIANA

Indianapolis Bankruptcy Attorney John F. Bymaster on Avoiding Bankruptcy

The Dangers of “Cheap” Bankruptcy – Indianapolis

 

What to Know about “Cheap” Bankruptcy in Indianapolis

Let’s discuss the dangers of “cheap” bankruptcy – Indianapolis.  You may have heard of impossibly good “deals” to file for bankruptcy.  These deals truly are “impossible” because you are usually not getting very much – at least for how much you pay.  You are only paying somebody in those situations (usually) to do the bankruptcy yourself.   If you are looking for an Indianapolis bankruptcy cheap, you may need to analyze first what it is you are actually paying for.

A very affordable, legitimate bankruptcy attorney usually charges about $500-$1000 and requires the $335 court cost (on the lowest end).  There could be very limited “community pro-bono” sort of options for low income people that could charge very slightly less.  These are usually very difficult to access because you must be below the poverty line and apply for help at a legal clinic.  Also, the amount of resources at these places are usually limited: there are too many people trying to get an Indianapolis bankruptcy cheap for the “pro-bono” resources available.

If you see an ad that says they are charging $44, $159, or even $299 for bankruptcy, be careful!  You may only be paying for a “bankruptcy preparation service” or worse you may only paying to get access to the bankruptcy forms (which are already free on the court’s website!).  In either of these services, you are essentially just paying somebody so that you can do the bankruptcy yourself.  They cannot help you do very much: they are not allowed to file the forms for you or give you any form of legal advice.  This is a “cheap” Indiana bankruptcy option, but you are not really getting very much for the price you pay.

These peddlers of “ultra-cheap” bankruptcy make light of how complex bankruptcy filings can be.  They act as if they are experts in bankruptcy, saying thing such as “you do not need to pay a bankruptcy attorney anything because all they do is fill out your forms.”  These statements cannot be farther from the truth.  A bankruptcy attorney does spend a considerable amount of time filing forms and dealing with the court and bankruptcy trustee.  However, the bankruptcy attorney’s knowledge and experience is what will make your bankruptcy a smooth, easy, and safe process.  Without a bankruptcy attorney, you could lose your house, cars, or even a great deal of money.  Making a knowledgeable bankruptcy plan is essential: it is more essential than getting your Indiana bankruptcy cheap.

Therefore, you may need to be careful about having unrealistic expectations when trying to find a bankruptcy “cheap.”  Most people want a knowledgeable guide to take them through the bankruptcy process safely.  You can rest assured at our office that we can serve as such a guide: you can call us and we will affordably (not cheaply – joke) guide you through the bankruptcy process.

-Indianapolis Bankruptcy Attorney John Bymaster on the Dangers of “Cheap” Bankruptcy

Cheap Bankruptcy

 

The difference between secured and unsecured debt?

unsecureddebt_1

We have a lot of Indianapolis Bankruptcy clients come in for a free consultation and wonder what is the difference between secured and unsecured debt.  The difference between the types of debt can be confusing.  Many times I explain that there are two types of debt:  secured debt and unsecured debt.

First, let’s discuss secured debt.  When you have a secured debt, an item is tied to it and pledged as collateral.  A lien is put on the asset which gives the lender the right to take away the asset if you are behind on making the payments.  An example of when you would have secured debt is a mortgage.  When you have a mortgage it is secured by your house, and the lender puts a lien on the home.  If you become delinquent on the payments or stop paying the monthly payments, then the lender will foreclose on the home.  Another example is if you get a loan to purchase a car.  The car is the item that is tied to the loan and it is pledged as collateral.  If you fall behind on your monthly payments, then the lender can repossess the car.

Unlike secured debt, unsecured debts are not tied to collateral.  This means that the lender does not have the right to any collateral for the debt.  If you fall behind on payments, the lender cannot take any of your assets – at least according to the loan agreement you have made.

With unsecured debts, the lenders still have other actions they can use to get you to pay.  Many times they hire a debt collector to get you to pay.  If that doesn’t work, many times they will sue you and ask the court to garnish your wages, take an asset, or put a lien on your house until you have paid back the debt.  Many times the delinquent status is reported to credit bureaus, making the default show up on your credit report.

There are many unsecured debts.  The most common is credit card debt.  Other unsecured debts include medical bills, student loans, and payday loans.

If you are struggling with your secured debt or unsecured debt, our office can help.  Whether the solution is debt settlement, an Indiana Chapter 7 bankruptcy, or an Indiana Chapter 13 bankruptcy, we can help.  If you live in Indiana, don’t hesitate to give my office a call today to set up a free face-face consultation.

Also, for more information, check out the video below.

-Indianapolis Bankruptcy Attorney John F. Bymaster

 

 

What happens to my credit score when I file bankruptcy?

credit-score

At our Indianapolis-area bankruptcy attorney office, we have a lot of clients that worry bankruptcy will destroy their credit score.   Our clients feel as if they will never be able to build their credit back up.  We encounter a lot of misconceptions and we are asked many times, “What happens to my credit score when I file bankruptcy?”  What a lot of our clients don’t realize is that bankruptcy can quickly improve someone’s credit score if they are delinquent on accounts or if their credit score is already in the tank.

Often times when someone files bankruptcy, their credit score can get better right away.  This is because the delinquent accounts, no-pays, and late payments are eliminated right away.  When a person files for bankruptcy, all the previous items on a credit report are wiped away and the person gets a fresh start.

Let me give you a brief illustration of what happens to a credit score in bankruptcy.  Let’s say there is “A” credit and “F” credit.  “A” credit would be the highest credit you could achieve and “F” would be the lowest.  Often times when someone comes in and files bankruptcy, they have “D” or “F” credit because they have delinquent accounts.  When they file for bankruptcy, all the creditor’s reports of the bad credit are eliminated and usually the person ends up with “C” credit immediately after filing bankruptcy.  A few people may see their credit score is negatively affected by bankruptcy, but this is probably because they had “A” or “B” credit.

Some of the reason for this instant “C” credit rating is because your potential creditors know that you have recently eliminated your debt.   They also know that you cannot file bankruptcy under Chapter 7 again for 8 years, which makes the creditor more likely to offer certain types of loans.

After you file for bankruptcy, you can build your credit back up.  A lot of times our clients receive offers for smaller-balance credit cards or finance offers for automobiles in the mail immediately after their bankruptcy case.  After 1-2 years our clients are usually eligible for larger financing options like mortgage loans.  Many times after two years, are clients are eligible for home mortgage programs such as FHA financing.

Although there is a misconception out there that bankruptcy can ruin your credit, a lot of times it is actually the first step to rebuilding your credit score.  If you have any more questions about filing bankruptcy or credit, don’t hesitate to give our office a call to set up a free consultation.

– Indiana Bankruptcy Attorney John Bymaster.

The Indiana Sheriff Sale: What Happens to Homes Sold in Indiana Sheriff Sales?

The Indiana Sheriff Sale: What Happens to Homes Sold in Indiana Sheriff Sales?

Stop Foreclosure

At our Central Indiana bankruptcy office, many of our clients set up a free consultation because they have a sheriff sale scheduled on their house.   We stop many sheriff sales every year – sometimes a month before and sometimes minutes before.  We stop sheriff sales all through Indianapolis and the surrounding area.   We have stopped sheriff sales before in several Indiana counties.  A sheriff sale can be a mystery to those who have not experienced it, but the Indiana sheriff sale process is very simple.  Let’s discuss what CAUSES a sheriff sale and what HAPPENS at the Indiana sheriff sale.

A sheriff sale is basically the end result of defaults on mortgages payments.  When a homeowner defaults on his or her mortgage, the mortgage lender files a complaint for mortgage foreclosure in county court, civil division.  After all the parties have been notified, the court allows them a time to “answer” to the complaint.  The homeowner, usually through their attorney, can challenge the charges if they have been paying their mortgage payment as agreed to the lender.  In our experience, many homeowners will end up not answering the mortgage foreclosure suit for whatever reason.  If the homeowner answers, usually a trial is set or a motion for summary judgment procedure will ensue.

At the time of the complaint, the homeowners can also ask for a settlement conference.  It is important to note that answering the lawsuit (denying the claims) is NOT the same as requesting a settlement conference.  After judgment is entered in favor of the mortgage lender, the judge will issue an order for foreclosure and the home or real estate in question will be allowed to proceed to the sheriff sale process.  The attorney for the lender will file a praeipe with the court, and this will command the sheriff to appraise, advertise, and auction the real estate.

The sheriff generally gets three appraisals for the property which are taken only from an exterior inspection of the real estate.  After obtaining the appraisals, the sheriff will schedule the property for sale and advertise the property.  The properties are usually listed on websites like SRI Incorporated.  At the sheriff’s sale which is usually held at the sheriff’s office, bidders usually do not need to pre-register, but they do need to arrive to the sale about 30 minutes prior to its schedule start time and the must be able to meet the terms of the sale (be able to pay any tax liens, etc.) Keep in mind that some properties can be withdrawn before the sheriff sale and this generally happens if the homeowner files for Chapter 7 or Chapter 13 bankruptcy.  Some counties may vary on proof of availability of funds.

Upon arrival at the Indiana sheriff’s sale, bidders are given a document that lists all the real estate that will be auctioned.  For each property up for auction, a minimum bid is listed.  Bidders must start above that price or the property will be awarded back to the lender.  In Indiana, there are several companies like SRI Incorporated that act as the auctioneer.  To begin the auction the auctioneer greets the bidders with general terms of the sheriff sale and then the bidding begins.  Generally, auctions go very quickly and do not last very long.

If a property is sold at a sheriff’s sale, a judge will issue a decision confirming the sale and orders the distribution of proceeds by the sheriff’s office.  The sheriff is responsible for distributing the funds and the issue of the deed to the new property owner.  If the property is not sold at the sheriff sale, it can go back and be re-advertised and re-auctioned.

Remember, that a sheriff sale can be stopped by filing Chapter 7 or Chapter 13 bankruptcy, but it must be filed BEFORE the date of the sheriff sale (before it is conducted).  If you have questions, just give our office a call and set up a free consultation with Indianapolis Bankruptcy Attorney John Bymaster.

-Indianapolis and All-Indiana Bankruptcy Attorney John Bymaster

Bymaster Bankruptcy Law Offices – 317-769-2244