Lake Station Bankruptcy Attorney
Although filing for bankruptcy may feel like a last resort, it is often the best way to discharge debts and move on with your life. Unfortunately, the filing process is complex, which can have serious consequences for those who are filing without the aid of an attorney. To ensure that you comply with all procedural requirements and file your claim on time, you should consider speaking with an experienced Lake Station bankruptcy attorney who can assist you.
Declaring bankruptcy is more difficult than most people think, as filers are required to take a series of procedural steps before their claim will be processed and approved. For instance, those who are considering filing for bankruptcy must gather a substantial amount of financial documentation, including records of:
- Current income sources;
- Monthly living expenses;
- Both secured and unsecured debts;
- All assets and possessions; and
- All tax returns filed within the the two years.
Filers should also include any deeds to real estate that they own, as well as titles to their vehicles, and loan records. Once these documents have been collected, the applicant must file a two-page petition, in addition to a series of other forms, at which point the applicant’s income and expenses will be analyzed under the means test, which compares a person’s average income for the previous six months to the median income for Indiana. If the income falls below the median, an applicant can choose to file for Chapter 7 bankruptcy. If, on the other hand, a person’s income exceeds the median, he or she may be required to file for Chapter 13 bankruptcy.
Once bankruptcy paperwork has been filed, an automatic stay will immediately go into effect, which prevents creditors from directly contacting the petitioner and also stops any foreclosure proceedings.
Requirements for a Chapter 13 Bankruptcy
Those who qualify for Chapter 13 bankruptcy are also required to submit a repayment plan, under which an applicant agrees to pay outstanding bills after monthly expenses have been covered. Priority claims, such as taxes and back child support must already be paid, while debts that are unsecured, such as credit card debt or medical bills can be paid in part. Furthermore, all disposable income must be paid into the plan for a minimum of three years.
Chapter 7 Bankruptcy
Filers who qualify may be able to apply for Chapter 7 bankruptcy, which essentially wipes out a person’s debts. Petitioners who have their claims approved will have their assets liquidated and sold, with the exception of exempt property. The net proceeds of the sale are then distributed to creditors. The following types of assets are considered exempt and can be protected from creditors:
- Real or personal property used as a residence;
- Life insurance policies;
- Property belonging to a business partnership;
- Public or private retirement benefits;
- Health aids; and
- Workers’ compensation benefits.
Those who file for Chapter 7 bankruptcy can also keep certain secured debts by signing a Reaffirmation Agreement. However, reaffirmed debts cannot be erased through bankruptcy for at least another eight years.
Finally, anyone who files for bankruptcy must undergo credit counseling within six months before petitioning the court for relief and complete a financial management course after the filing process has concluded.
Contact an Experienced Lake Station Bankruptcy Attorney Today
If you are considering filing for bankruptcy and don’t know where to start, please contact the Law Office of Kevin M. Schmidt, P.C. at 219-756-0555 to schedule a free one-on-one consultation with a dedicated attorney who can evaluate your case.