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Discount Bankruptcy in Indiana

 More Bankruptcy Attorneys and Less Bankruptcy Cases

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There has been a marked recent decline in total bankruptcy filings across the United States. Because there are less bankruptcy filings there has been more competition to file the cases among attorneys. This has resulted in discounted, reduced rates for bankruptcy services. Discount bankruptcy is very common now: for some reason there are more bankruptcy attorneys even though there are less total cases.

Why Are There Less Cases Resulting in Discount Bankruptcy?

After the 2008 financial crisis, there was an increased amount of bankruptcy filings that quickly came onto the scene. Before 2008, high credit card balances were extremely common. In addition, 2008 brought with it a massive amount of homeowners who could no longer support their mortgage payments and were left with negative equity situations. Bankruptcy quickly was on the rise, reaching over 20,000 cases that were filed in the Indiana Southern District alone. This increase in filings culminated in 2011 and then markedly declined thereafter.

Why the Decline in Total Cases?

Contrary to popular belief, the number of bankruptcy filings does not exactly equate to troublesome economic times. The increase of bankruptcy filings can only be stimulated for a short period of time by economic failures that result in job loss and other factors that lead to bankruptcy. What really drives bankruptcy is a healthy economy where consumer lending is very free, easy, and prevalent. Ironically, It can be argued that only a healthy modern economy will result in high or consistent U.S. bankruptcy filings.

If There are Less Bankruptcy Cases, Why Are There More Attorneys Now Offering Bankruptcy Services?

The reason why there are more attorneys out there offering discount bankruptcy services is due to the fact that there is a surplus of attorneys and there is limited legal work opportunities due to the progressively failing United States economy. Therefore, attorneys are picking up additional practice areas that may include discount or affordable bankruptcy services. Some attorneys are only offering bankruptcy services but others are just adding it to their list of practice areas.

Discount Bankruptcy Can Sometimes Not Be The Way To Go

Usually, the best way to go is to find an attorney that has only done bankruptcy as their majority practice area for a considerable period of time. A newer office or an office that has added bankruptcy as a discount service can sometimes be a bad choice. This office may not be sufficiently familiar with the bankruptcy system and its laws. Make sure to find an experienced attorney with affordable rates: this will result in a better experience While still saving you money.

Conclusion:  Discount Bankruptcy Can Save You Money but Be Careful

The search for affordable, cheap, and discounted bankruptcy services can sometimes lead a potential bankruptcy filer into a very bad direction. When you are searching for discount bankruptcy services, remember that “you get what you pay for.” Always use an attorney when filing for bankruptcy and make sure that attorney’s office is experienced with an obvious history of getting many people out of debt.

~Indianapolis Bankruptcy Attorney John Bymaster on Discount Bankruptcy in Indiana










Can Bankruptcy Affect my Business?

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Can Bankruptcy Affect my Business? Filing Chapter 7 May Not Affect Your Business

If you file for Chapter 7 bankruptcy, it may not necessarily affect your business. A personal bankruptcy is designed to eliminate your personal liability for your debts. Bankruptcy many times will not affect your business: a few examples below, however, will show how bankruptcy in some situations can drastically affect your business. 

Business High Property Amounts or High Business Value Can Be a Problem

Whether your business is a separate entity (such as a corporation or LLC) or a sole proprietorship, you OWN your business. Therefore, whether you own 100%, 50%, or whatever the percentage, it can become property that your bankruptcy trustee can use to help repay some creditors in your case. The general rule is whether non-exempt assets in the business or the business itself can be sold to repay creditors. If your business does not have high amounts of property or value, it may likely be okay. 

In addition, if your business is also heavily laden with debt, your business debts may greatly exceed your business assets. In such a debt laden situation, it is much less likely the business or the assets can be sold. Any business property situation MUST be assessed by an attorney because every situation is different. Without proper complete evaluation, you could put yourself unwittingly in a position where business property or the business itself can be sold!

Co-Mingle Problems Such as Accounts Receivable and Business Bank Accounts

Many times small business owners will co-mingle their business and personal lives. At the time of their bankruptcy, there may be large amounts of accounts receivables or bank accounts balances unrelated to their personal life but still exposable as an asset to the bankruptcy trustee. The Debtor that was $2500 in their checking account for a construction job’s materials may have a problem. The same Debtor if still owed $3500 for a previous construction job may have a double-problem. As an example, this $6,000 (especially if it is being run under personal accounts) could have to turn over those amounts to the bankruptcy estate. 

Such situations are not “fair” per say, but meet the “black and white letter” of the bankruptcy code and state exemption amounts. It may be best to have no business money in possession or owed to you at the time in which you file for Chapter 7 relief. Of course, separately held and clearly operated corporations (or other entities) may have a greater level of protection from in such matters. In separate entity situations, the entire entity is usually assessed by the trustee as opposed to individual amounts owed or in possession of the corporation at the time of filing. Because of abuse sections in the bankruptcy code and differing situations, this may not always be the case, however. Once again, consultation and guidance of an attorney are very important. 

Filing Bankruptcy on Your Business Instead of Personal Bankruptcy

Of course, multiple articles or even books would be required to fully discuss business bankruptcy. But, within the scope of this article, it is important to point out a couple aspects. First, if you file business bankruptcy (unless Chapter 11), the court will assume that you are no longer going to continue with operations. All remaining assets of the business are solid to creditors and you will close the business. You will then need to start a new corporation or entity if you desire to engage in similar business in the future. 

Second, sometimes a personal and business bankruptcy should be both be filed. In this way, a clear message is sent to all creditors that the old business is over and no assets (or whatever assets administered) are available. Then, if future desire to participate in some similar business is desired, a completely new corporation (or set of books) should be used in the future. Business bankruptcy is very complex and should not be attempted without the aid of an attorney and an accountant. 

Chapter 7 May Not Be The “End” For Your Business

Filing a Chapter 7 case may signal the end of your business: sometimes it can signal a new beginning. If your former debt situation was impossible to resolve, sometimes the only way you can continue in your same line of business may be to get relief in Chapter 7. Starting over can be difficult, but staying in a crushing debt situation can be much worse or even impossible. Do not stay forever in an unprofitable, impossible business situation. Contact a our office and get a free consultation to see what options you have. 

~Indianapolis Bankruptcy Attorney John Bymaster


Can My Bankruptcy Be Rejected or Turn Down?

Indianapolis Bankruptcy Attorney Explains “Bankruptcy Rejection”

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Can My Bankruptcy Be Rejected or Turn Down? – Practicing Bankruptcy Law near Indianapolis, Indiana, we are many times asked whether a bankruptcy can be rejected or turned down. Can your case be rejected or turn down? The answer is “No.” If you follow the rules of Chapter 7, you generally cannot be “rejected” or “turned down” for bankruptcy relief. Therefore, the question becomes how do you not follow the rules of bankruptcy so that your Chapter 7 case could be rejected.

Rejection in Chapter 7 Due To Too Much Income

If your attorney’s interpretation of the Chapter 7 Means Test does not match up to the United States Trustee’s interpretation, you may have your case rejected in Chapter 7. Therefore, if you are “very close” or “right on the line” on whether you can file Chapter 7 bankruptcy, the United States Trustee may file a motion to dismiss the case or alternatively to convert to Chapter 13. You would be “forced out” of Chapter 7 into Chapter 13 or your case would be dismissed. Although this scenario is not very common, it can happen on very close cases.

Rejection Due To Not Following The Rules of the Trustee and Bankruptcy Court

If you ask for Chapter 7 relief, you have to follow the rules after you file your case. If the Trustee (the overseer of your case) holds that an asset or information needs to be turned over, then you must comply quickly. If you refuse to turn over an asset or spent up the asset and cannot repay it, the Trustee will eventually revoke your discharge and your original Chapter 7 case will be rejected.  Do not worry: if you follow the rules and request of the Bankruptcy Trustee, this should never happen.

Rejection For Fraud

The final cause for rejection of your Chapter 7 case is for fraud. Although findings of fraud are rare in Chapter 7 bankruptcy, your bankruptcy case can be rejected and your discharge can be revoked if you are caught lying to the court or trying to abuse the system. With fraud, you can also face criminal charges. Once again, this is very rare and you do not need to worry about this more than likely if you are a genuine, regular bankruptcy filer.

Just Follow the Rules and You Will Not Be Turned Down or Rejected for Bankruptcy

If you follow the rules, you have nothing to worry about with bankruptcy. You are entitled to the relief and it will not be held back from you. Do not be afraid of being rejected for Chapter 7 relief. Call our Indiana Bankruptcy office and get relief today.

– Indianapolis Bankruptcy Attorney John Bymaster

Indianapolis Bankruptcy and Inheritance

Indianapolis Bankruptcy and Inheritance: What You Need to Know

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The rules of bankruptcy and inheritances can protect you from losing an inheritance to creditors.  In Indiana, there is no special bankruptcy exemption that allows you to keep your inheritance when you file for bankruptcy. Therefore, it is very important in Indiana to understand clearly which inheritances can be come part of your bankruptcy estate.

Inheritances and Chapter 7 Bankruptcy

There are special rules that apply to bankruptcy and inheritances in Indiana. When you file for bankruptcy under Chapter 7, any inheritance that you are already due to receive is part of the bankruptcy estate automatically. Therefore, if someone has already died and your bankruptcy case has been filed, you will be required to turn over the proceeds of your inheritance to the Bankruptcy Trustee to repay creditors. The special rule applies, however, where inheritances become due for up to six months after the bankruptcy case is filed. For this six month, 180 day period, the inheritance must still be turned over to the bankruptcy estate to help repay your debts.

Chapter 13 Bankruptcy and Inheritances

Chapter 13 bankruptcy can even create a larger period of time where any inheritances could be forced to be paid to the Bankruptcy Trustee to repay creditors. This is because during the entire life of the Chapter 13 repayment plan, you will be required to turn over any inheritance received at that time to help repay some of your creditors. Therefore, if you are expecting to receive an inheritance during your Chapter 13 bankruptcy case, it is very important to make plans accordingly. Perhaps a Chapter 7 case could be advisable if you are eligible to reduce this time period in which inheritances must be turned over to the Bankruptcy Trustee.

Conclusion:  Inheritances and Bankruptcy Require Guidance By An Attorney

If you are anticipating an inheritance sometime in the future, careful debt relief planning will be required to make sure that you can enjoy the maximum benefits possible. Bankruptcy can be a powerful tool in planning for debt relief even if you may receive an inheritance sometime in the future. If your plan includes bankruptcy, make sure to understand the ramifications of family member’s early passing.

~Indianapolis Bankruptcy Attorney John F. Bymaster on Inheritances and Bankruptcy

“Cram Down” of Auto Loans

The “Cram Down” of Auto loans explained by an Indianapolis Chapter 13 Attorney

"Cram Down"

“Cram Down” of Auto Loans -Being an Indianapolis Chapter 13 Bankruptcy Attorney, I have gone through the “cram down” process for auto loans in Chapter 13 bankruptcy very frequently.   This “cram down” provision allows for a debtor to reduce the secured amount that must be repaid for their car or truck down to the current market value of the vehicle.   Let me explain how “cram down” works.

Give Me An Example of a Car Cram Down

If a car is eligible for a cram down, then you will only be required to pay the current market value of the car back to the creditor.   As an example, if your loan for the automobile was for $12,000 but the current market value was for $8,000, you would only have to pay back $8,000 as your secured debt amount.  You could save considerably because you would not have to pay back (at least 100%) almost $4000 (plus whatever interest).   In addition, you will likely only have to repay at an interest rate at about 4.5-5%.

Why and When am I Able to Cram Down an Automobile Loan?

When Congress wrote the Bankruptcy Code, they wanted to treat different “classes” of creditors as fairly and evenly as possible.   Therefore, to address part of this concern, Congress added Section 506 of the Bankruptcy Code.  For automobiles, Section 506 of the bankruptcy allows auto loans that are more than 910 days old (or approximately 2.5 years old) to be “crammed” down to market value.    Because these “older” auto loans can be (in reality) greatly unsecured after 2.5 years, Congress decided that it was fair both to the debtor and other creditors to only pay the secured portion back to the creditor with interest.   The rest of the auto creditor’s claim is then treated the same as all other unsecured creditors are treated within the Chapter 13 plan.

Are There Any Exceptions that MAY Allow a Cram Down Before 910 Have Past?

The “910” rule generally applies to a “purchase money” creditor only who lends to the debtor for a personal use vehicle.  It may be possible in some situations to cram an automobile beforehand if a vehicle has been refinanced by a new lender (or possibly the same lender), the automobile is used for business use, or possibly if the vehicle was purchased for someone else instead of the debtor.   Such situations could be sufficient to surpass the requirements of “purchase money” and “personal use.”  However, it is very likely that your creditor could object in your Chapter 13 case.  If that is the case, you will need to either settle with the creditor or let the judge decide if you can cram your automobile in such a situation.

A Unique Opportunity: Cramming Down Automobiles in Chapter 13

As an Indianapolis Chapter 13 Bankruptcy Attorney, I have seen many success stories play out over the years when our clients have crammed down their automobile loans in a Chapter 13 case.    We have seen budgets that simply do not work.   We have also seen massive balances that will never allow our client to pay off the vehicle before it breaks down.   Situations like this are perfect for the Indiana residents to take advantage of Chapter 13’s cramming provisions.

~Indianapolis Chapter 13 Bankruptcy Attorney John Bymaster