Chapter 13 Bankruptcy in Indianapolis, IN is a legal procedure can take to get themselves out of debt. The process begins with the debtor filing a petition with their local court system. The petition is a legal document that lists all the debtor’s assets, investments, bank accounts, and other ways they earn income.
Chapter 7 is the type most debtors commonly choose to file. It is referred to as straight bankruptcy because the discharge comes within six months of filing. However, changes in laws now tightly govern who can file Chapter 7.
The courts apply a Means Test to see if your income meets the new requirements for Chapter 7. This test compares your disposable income against the average income in your state. If your income falls on or below the limit, you qualify for Chapter 7. Chapter 7 makes selling certain assets a requirement. The money generated from sells is divided among creditors. Your case is converted to Chapter 13 if you do not qualify for Chapter 7
There are many advantages to filing Chapter 13 bankruptcy.
You are not required to sell assets and you have a chance to pay creditors. You only need to have a steady job with enough income to pay creditors. Chapter13 offers more flexibility than Chapter 7. If your income changes, you can get a new payment structure. You must also meet other criteria. Your debt to income ratio cannot be too high and unsecured debts, or debts with no collateral like medical bills, must not be more than $336,900.
Secured debts should be less than $1,010,650. The new laws make it mandatory that you take pre-bankruptcy debt counseling. You are required to have filed a federal income tax return and present it in your first meeting with creditors. Debtors filing Chapter 13 cannot have a previous bankruptcy filing less than 180 days old.
Chapter 13 Bankruptcy in Indianapolis, IN can be complicated with all of the laws. You may represent yourself, but getting a lawyer is recommended. A lawyer knows how the proceedings work and can offer legal advice. Many lawyers allow a free consultation. Visit The Wright Law Group, LLC for more details.