Bankruptcy is a legal process based on federal law by which you can, under certain conditions, have your debts "discharged". The goal is to offer people who have fallen on hard times to have a second financial chance by freeing you from any debts that it's unlikely you'll ever be able to repay. It can be a complicated process but one which can really give you and your family a new lease on life moving forward, and Justice Unlocked is proud to announce that we are now handling Chapter 7 Bankruptcies!
What is a Chapter 7 Bankruptcy and how do I know if I qualify?
In order to qualify for a Chapter 7 bankruptcy, you must earn less than the median state income on a monthly basis for households of your size. You could be asked to submit to a 'means test' which examines all your income and expenses and all your debt. Then, if it's determined that it's unlikely you'll ever be able to repay your debts even on a payment plan, the Court will discharge your debts and wipe the slate clean. Roughly, the median state income for different size households in Indiana is approximately:
1 Member Household - $48,243.00
2 Member Household - $60,452.00
3 Member Household - $71,090.00
4 Member Household - $85,368.00
For households larger than 4 add +$8,400 for each additional person! Some disability and other types of income may not be included in the means test calculation, schedule a consultation to learn more!
Are there debts that can't be discharged? And will I be able to keep my property?
Yes! Bankruptcy will not discharge debts that are related to child/spousal support, tax-related debt, most student loans, and debts owed in a court judgment where you intentionally harmed someone else, as well as some other types of debts. Whether or not you'll be able to keep your property or not is a trickier question. The law provides certain "exemptions" in various amounts for different kinds of property, but the Trustee's job is to get as much money for your creditors as possible. Generally, if the value of your property makes it likely that the bankruptcy trustee will be able to sell it and get a chunk of money which could be distributed to your creditors, they might consider seizing it. In a lot of cases, you can keep property which would be seized by reaffirming that you'll keep paying the debt on it.
Just remember this formula: If the Sale Value - Costs of Selling - Exemption Amount (if any) is more than $0, the Trustee might ask to seize your property!
What does it cost to do a bankruptcy?
There are Court Filing Fees, Credit-Counseling fees, and a post-filing certificate. You might also need a credit report! All of these fees go to someone other than your lawyer, and a lot of them can be waived. But all together they add up to about: $336 (Court Fee) + $24 (Credit Counseling) + $14 (Post-Filing) = Around $475.
At Justice Unlocked, for help preparing your petition, filing with the Courts, representing you at the Creditor's 341 Meeting, and otherwise helping you navigate the Bankruptcy process with compassion and expertise. Just like with other cases we charge a sliding scale fee which is based on your household size and income. We have three tiers on our sliding scale, $700, $900, and $1,100.
If you're wondering whether or not bankruptcy is right for you, please contact our office to schedule an appointment to see if we can represent you. You can call us at (812) 269-8277 or fill out our online intake form on the website.
This article is not legal advice. Last edited October 2018. Laws can change, so make sure you have up-to-date information.
You should always seek the assistance of an attorney before attempting to file a lawsuit.