Lately I have noticed many young people are moving forward with their financial lives in fast forward. What I mean by this is that the 27 year-old couple is gearing up to purchase a $400,000.00 home in the same neighborhood as their 60 year-old parents. I believe that young people today feel a lot of pressure to jump into large financial purchases in order to prove themselves as adults. I see young couples getting married and immediately making huge purchases the week after they get back to their honeymoon. This afternoon I urge young people and young couples to take their time with large financial decisions. Don't be afraid to keep renting even though all of your friends are buying 5-bedroom houses with 3 car garages for two (2) people who drive two (2) cars. Don't be embarrassed to drive a ten (10) year old car into the ground because it is paid off when your friends are all financing the latest vehicles and pay $500.00 per month for the pleasure of driving them.
Lets face it, young people graduating from college and young professionals have not entered a great job market. Ok.....it's a terrible job market. Even though the recession is technically over most people do not see the end of the recession in their own personal finances. People are leaving school and making way less than they thought they would make when they took out the student loans to finance their educations. The unemployment rate in Indiana is still over 8%. Those who never dreamed that they would be unemployed are considering taking jobs for $10.00 per hour after being unemployed for months if not years. AND those older people still working are not retiring because their retirements are so diminished that they cannot afford to retire!!! This is endlessly frustrating for those attempting to move up in the ladder at a company because there are simply no openings. I am sorry for being so pessimistic and am not trying to say that young people should give up and walk away with their tail between their legs....quite the opposite. I am saying the young people need to work harder than ever before. And along with working harder they need to be smarter about their financial choices.
At Halcomb Singler I speak with people who wish they could go back and slow down all the time. Some people wish they hadn't purchased a home (or a vacation home) or others wish they hadn't bought the $35,000.00 vehicle. Sure, it is fun to take all of your co-workers outside to check out your brand new Acura. It is also fun to have people over for a house warming party. And it is the most fun when you can actually afford the things that you are purchasing. And for the 100th time affording something does not mean that you currently bring home enough to make the payment. While living in a large home and driving a fancy car are nice, being able to fall asleep at night without having to worry how to pay the bills is much nicer.
An for those people living in Indianapolis or the surrounding areas that are struggling with debt I urge you to speak to a bankruptcy attorney if you feel that you have no way out. Typically people feel much better after they have spoken to an attorney and have a plan for how to tackle their debt. Sometimes that plan includes bankruptcy and sometimes it doesn't, but I believe it usually helps alleviate a lot of stress. If you would like to set up a free initial consultation to discuss whether bankruptcy may be helpful to your financial situation call Halcomb Singler at 317-575-8222 or click here.
Halcomb Singler, LLP, is a debt relief agency. It helps people file for bankruptcy under the bankruptcy code. No attorney-client relationship with the firm of Halcomb Singler, LLP, is created through this blog. Also, please note that Erika Singler is an attorney licensed in Indiana and does not seek to practice law in any jurisdiction in which they are not properly authorized to do so. The information contained in this blog is general in nature and should not be relied upon for the circumstances of any individual(s) or businesses.
Tuesday, July 26, 2011
Monday, July 18, 2011
How much will I pay each month into an Indiana Chapter 13 Bankruptcy
This is an excellent question....and one that I must answer in the typical lawyerly fashion of, it depends. I won't spend this posting in an in depth explanation of Chapter 13 bankruptcy. However, Chapter 13 bankruptcy allows a 3 to 5 year repayment plan somewhat similar to a debt consolidation. Each month the debtor in a Chapter 13 case makes a payment to a trustee. The trustee takes a cut of the money to pay out creditors according to the Chapter 13 repayment plan filed with the bankruptcy court by your attorney. If you are able to make all of your repayment plan payments then your debt will be discharged (relieved) at the end of the repayment period regardless of the amount you paid over that 3 to 5 years.
So the million dollar question that every potential Chapter 13 debtor I meet with at Halcomb Singler, LLP, wants to know is....how much will my Chapter 13 payment be? Unfortunately, most of the time this is not something I can answer at the initial consultation. The reason for this is that a Chapter 13 bankruptcy payment is somewhat of a math problem to figure out. There are different variants that go into each calculation that vary based on each individual debtor. I typically must have a client's past 6 month income history as well as a detailed list of your household expenses as well as a listing of all of the debts that a client has in order to determine the amount of the Chapter 13 Plan payment.
What I can say about Chapter 13 plan payments is that your payment will be no less money than you have left at the end of the month after paying your reasonable living expenses. Reasonable living expenses include rent or mortgage payments, utilities, cable/internet, homeowners association dues, car payments for any vehicle you are keeping, clothing, insurance, medical costs, gas, vehicle maintenance, food, home maintenance, vehicle registration, etc. Reasonable living expenses in "bankruptcy world" do not typically include house cleaning, traveling sports for children, a country club membership, entertainment expenses in excess of $100-$150 per month depending on your family size, etc. It is best to discuss any atypical expenses with a bankruptcy attorney because there are some situations in which a larger expenses may be justified. For example, higher than normal food expenses may be allowed if a member of your household has an illness that requires them to eat specific foods, etc. However, it is important to stress that your Chapter 13 payment is not only determined by the amount of your reasonable living expenses.
In addition, your bankruptcy attorney will prepare a "Statement of Disposable Monthly Income" to be filed in your Chapter 13 Bankruptcy. This calculation is the Court's attempt to determine how much money a family of your size with your income should have left at the end of the month. The amount left over in this test is what must be paid to unsecured creditors through your repayment plan....even if it is higher than what you believe you have left after your reasonable living expenses.
After several years of advising Chapter 13 Bankruptcy clients, what I can say is that in my experience debtors can typically afford their monthly Chapter 13 payment. It is certainly not easy and will require strict adherence to a budget. In addition, a Chapter 13 bankruptcy can be an excellent tool to deal with debt for homeowners who have fallen behind on their mortgage, have income tax arrearages, or earn an above-average income.
If you would like to meet with me for an initial bankruptcy analysis please contact me at 317-575-8222. I am happy to review your debts, income, assets and expenses and give you my opinion regarding whether bankruptcy may be beneficial to you, which chapter I believe would most benefit you, which Chapter you may qualify for and answer any questions you may have regarding bankruptcy in general.
Halcomb Singler, LLP, is a debt relief agency. It helps people file for bankruptcy under the bankruptcy code. No attorney-client relationship with the firm of Halcomb Singler, LLP, is created through this blog. Also, please note that Erika Singler is an attorney licensed in Indiana and does not seek to practice law in any jurisdiction in which they are not properly authorized to do so. The information contained in this blog is general in nature and should not be relied upon for the circumstances of any individual(s) or businesses.
So the million dollar question that every potential Chapter 13 debtor I meet with at Halcomb Singler, LLP, wants to know is....how much will my Chapter 13 payment be? Unfortunately, most of the time this is not something I can answer at the initial consultation. The reason for this is that a Chapter 13 bankruptcy payment is somewhat of a math problem to figure out. There are different variants that go into each calculation that vary based on each individual debtor. I typically must have a client's past 6 month income history as well as a detailed list of your household expenses as well as a listing of all of the debts that a client has in order to determine the amount of the Chapter 13 Plan payment.
What I can say about Chapter 13 plan payments is that your payment will be no less money than you have left at the end of the month after paying your reasonable living expenses. Reasonable living expenses include rent or mortgage payments, utilities, cable/internet, homeowners association dues, car payments for any vehicle you are keeping, clothing, insurance, medical costs, gas, vehicle maintenance, food, home maintenance, vehicle registration, etc. Reasonable living expenses in "bankruptcy world" do not typically include house cleaning, traveling sports for children, a country club membership, entertainment expenses in excess of $100-$150 per month depending on your family size, etc. It is best to discuss any atypical expenses with a bankruptcy attorney because there are some situations in which a larger expenses may be justified. For example, higher than normal food expenses may be allowed if a member of your household has an illness that requires them to eat specific foods, etc. However, it is important to stress that your Chapter 13 payment is not only determined by the amount of your reasonable living expenses.
In addition, your bankruptcy attorney will prepare a "Statement of Disposable Monthly Income" to be filed in your Chapter 13 Bankruptcy. This calculation is the Court's attempt to determine how much money a family of your size with your income should have left at the end of the month. The amount left over in this test is what must be paid to unsecured creditors through your repayment plan....even if it is higher than what you believe you have left after your reasonable living expenses.
After several years of advising Chapter 13 Bankruptcy clients, what I can say is that in my experience debtors can typically afford their monthly Chapter 13 payment. It is certainly not easy and will require strict adherence to a budget. In addition, a Chapter 13 bankruptcy can be an excellent tool to deal with debt for homeowners who have fallen behind on their mortgage, have income tax arrearages, or earn an above-average income.
If you would like to meet with me for an initial bankruptcy analysis please contact me at 317-575-8222. I am happy to review your debts, income, assets and expenses and give you my opinion regarding whether bankruptcy may be beneficial to you, which chapter I believe would most benefit you, which Chapter you may qualify for and answer any questions you may have regarding bankruptcy in general.
Halcomb Singler, LLP, is a debt relief agency. It helps people file for bankruptcy under the bankruptcy code. No attorney-client relationship with the firm of Halcomb Singler, LLP, is created through this blog. Also, please note that Erika Singler is an attorney licensed in Indiana and does not seek to practice law in any jurisdiction in which they are not properly authorized to do so. The information contained in this blog is general in nature and should not be relied upon for the circumstances of any individual(s) or businesses.
Monday, July 11, 2011
A Map for the Future
This post was written by Lindsay Williams, a Junior studying Political Science at Indiana University and an intern for Halcomb, Singler LLP.
One of the best strategies for preventing bankruptcy centers on the ability to evaluate, structure, and implement a sound financial plan. There is no doubt that the younger you learns such a skill, the more likely you are succeed in the future at avoiding falling prey to the dangers of debt and financial woes. Such financial experience is often gained for the first time after graduating from high school and entering the collegiate world and inheriting all of the money issues that go along with higher education. There are student loans, private loans, FAFSA requirements, credit card offers, cash advances, and textbook fees; all of which must be dealt with on a limited or non-existent income. So, what is the best strategy for a college student to use when determining exactly how to manage these new “adult” fiscal decisions?
The first necessary step is to look at the debt you are undertaking, any loans or credits, compared to the funds that will be supplied from savings, grants, employment, or even family members. Then, it is time to create a personal budget. Designate certain income for certain types of uses. For example, utilize the loan money for only educational purposes including tuition and textbooks while the money you make from family or a job can supply the groceries, utility bills, or any extras that may come up. If you are living with roommates you will need to talk to them ahead of time to figure out exactly what expenses you will be required to contribute. In addition, talk to your parents about what they will be willing to supply and what you will be solely responsible for. By giving yourself an allowance, you are able to track your spending and choose between what you want and what you really need. Budget this way a month at a time, but also try and review your spending to ensure it is on track at the end of each week and make any required adjustments to meet your financial goal. Once you sufficiently track your money it will be easier to recognize what indulgences and impulse buys you engage in and hopefully this will encourage a restraint in your spending behavior.
Of course entering into college encourages the social aspect of life which often times becomes a crucial source of money strain. Even though your friends may be able to go out every night, buy new clothes for every occasion, or eat out every night, it does not mean you have the same luxury. BUT, this does not mean you have to become some sort of awkward recluse. Being frugal does not mean you cannot be social; you just have to figure these expenses into your budget as well. Rather than relying on a credit card for all of the extra amenities, plan ahead and put aside a set amount for activities with friends. Instead of driving to class everyday and using gas money, take the extra time to use the public transportation system. Check to see if there is a discount associated with the restaurant or store you are going to when you show your student I.D. Also, look for the many FREE activities campuses offer throughout the weeknights and weekends. Not only will you meet more people, you will also get a free meal or t-shirt in the process. Furthermore, search for the best deals on textbooks by comparing the bookstore prices with online availability and also previous students. You can also sell these textbooks back either online or to the bookstore for some extra pocket money to do with what you please. One book may provide enough cash to fund a whole weekend out with your friends.
Even with a stellar budget, you may hit a small roadblock or unavoidable emergency that causes you to stress about your financial situation. In order to avoid damaging your finances in the long run and risking future bankruptcy, it is important to avoid racking up several credit card charges or taking out cash advances that you are not able to pay off in a short period of time. The more proactive approach to dealing with emergencies would be building a crisis fund that you can rely on when you hit a sticky situation. Depositing as little as five dollars a week into the fund could provide a world of relief when it comes time to use it. Also, do not be afraid to ask for help. Call home and let your family know you are in trouble and if that is not a viable option, speak with the financial aid office located on campus. Someone who is more experienced with such situations can point you in the correct direction and assist you in your financial decisions. In fact, most colleges set aside funds to assist with struggling students and resolve their difficult financial situations.
The good financial habits you learn and put into practice at a young age are sure to follow you into your future monetary endeavors as well. It is important to consider all of your options and looking at the big picture with your money rather than focusing on what you can get by with on a daily basis. Planning and researching is your best friend when it comes to spending wisely and keeping yourself financially secure. These are just a few tips to start you off right and help you build a bright future free of bankruptcy and full of opportunity.
Sunday, July 10, 2011
How to Ignore the Joneses
When people find themselves at Halcomb Singler for a free initial bankruptcy consultation they are often asking themselves how they ended up in this situation. As I have said many times before...needing to file for bankruptcy does not make you the worst person on earth. It does not make you immoral or a social outcast. However, how one arrived in a situation where bankruptcy was necessary should be examined. If nothing else it can help make sure that you never have to go through bankruptcy again.
For some bankruptcy is a product of mountains of medical bills or a job loss that has lasted 2 years or more. However, for many Hoosiers bankruptcy is the product of many years of overspending. I am not saying that people are living large buying fancy jewelry, art, antiques and eating out every day of the week. In my experience most people have lived just a little bit outside of their means over the course of many years. This means going out to eat a few times a week, buying a new outfit once a month, having a $200.00 per month cell phone contract or getting their nails or hair done once every two weeks. Often when these little extras began there was no problem in affording that extra trip to the nail salon, etc. However, times have changed in Indiana and the Indianapolis area since 2008. Many people have not received a raise, have had their pay cut, or have lost jobs.
One of the problems that I see again and again is that families fail to change their standard of living when their income decreases or stays stagnant over a period of years. Even if you haven't had a job loss or pay decrease, you have noticed that gas has gone way up and that prices at the grocery store have increased. To avoid overspending after an income loss, decrease or long period without an increase in income it is extremely important to budget. It never fails to amaze me how people get used to making a certain cell phone, cable or internet payment and don't change their plan when their income decreases. At the very least a quick call to the internet or cable company telling them you need a better deal or you will cancel your service (and meaning it) will knock off a few dollars from your bill each month. It is just simple math that if your pay goes down your expenses must go down too. If that means that your 12 year old can't have a cell phone any more than have the darn thing turned off. If that means that you don't go on a vacation (even over a weekend) until the finances improve then do it. You have to think of your change in finances as if you are on a diet. You have less money to spend so you have to do some belt tightening. It is not fun.....but you can either cut back on expenses, get a second or third job, or start yourself on the road to long-term overspending. I have met with hundreds of people who wish they had chosen option one or two.
Another reason I believe many Hoosiers start long-term overspending (especially in Hamilton County, Indiana where my office is located) is because they are trying to keep up with the Joneses. The cold hard truth of the situation is that you need to ignore the Joneses. This is best done by being happy with the things that you have, realizing that things are not what really what make you happy and just plain telling yourself that the Joneses are probably mortgaged to the hilt and have to use a credit card cash advance to pay their mortgage each month. Most people Hamilton County Indiana (including myself) would agree that they have just about everything that they need and want. It only takes picking up a newspaper to read about the way people in other countries are unable to access clean water, etc., before you realize that you really do have enough stuff. Similarly, I also think most people would agree that it is friends and family that really make you happy...not your brand new water softener. Whenever I watch television shows about people who narrowly escape death they are not talking about how the new couch they bought helped them come up with the mental toughness necessary to find their way out of the situation. They are talking about the fact that they had a wife/husband or children to get back to and that they wanted to see their son's graduation, walk their daughter down the isle at her wedding, etc. The last reason is probably the only way you haven't already thought about as a method for ignoring the Joneses. Just remember that the Joneses are probably full of it. They probably have about $10.00 in the bank each month in order to make the payments on the fancy cars that you drool over every day when you pull out of the driveway. The Joneses might have 2 loans on their 401k savings and no emergency fund. The Joneses probably haven't saved one penny for their little genius that they claim is going to be a Harvard grad some day. The Joneses are probably up at night stressing over how to make the mortgage payment next month. And maybe you are right and the Joneses are sitting on a mint, their house is paid off, they bathe in their money every day before going to bed and sit on a couch made out of money each night when they are watching television. But if you are trying to ignore the Joneses just do yourself a favor and tell yourself that they are broke. If you think to yourself that the Joneses are broke you won't feel the need to keep up with them. You will be better able to concentrate on the great things in your own life and resist the need to overspend just to keep up with them and you won't overspend.
If you are in Hamilton County Indiana or the Indianapolis are and have questions about bankruptcy CALL TO SET UP A FREE INITIAL CONSULTATION 317-575-8222. I am happy to review your situation and make a recommendation in favor of or against bankruptcy for no fee.
Halcomb Singler, LLP, is a debt relief agency. It helps people file for bankruptcy under the bankruptcy code. No attorney-client relationship with the firm of Halcomb Singler, LLP, is created through this blog. Also, please note that Erika Singler is an attorney licensed in Indiana and does not seek to practice law in any jurisdiction in which they are not properly authorized to do so. The information contained in this blog is general in nature and should not be relied upon for the circumstances of any individual(s) or businesses.
For some bankruptcy is a product of mountains of medical bills or a job loss that has lasted 2 years or more. However, for many Hoosiers bankruptcy is the product of many years of overspending. I am not saying that people are living large buying fancy jewelry, art, antiques and eating out every day of the week. In my experience most people have lived just a little bit outside of their means over the course of many years. This means going out to eat a few times a week, buying a new outfit once a month, having a $200.00 per month cell phone contract or getting their nails or hair done once every two weeks. Often when these little extras began there was no problem in affording that extra trip to the nail salon, etc. However, times have changed in Indiana and the Indianapolis area since 2008. Many people have not received a raise, have had their pay cut, or have lost jobs.
One of the problems that I see again and again is that families fail to change their standard of living when their income decreases or stays stagnant over a period of years. Even if you haven't had a job loss or pay decrease, you have noticed that gas has gone way up and that prices at the grocery store have increased. To avoid overspending after an income loss, decrease or long period without an increase in income it is extremely important to budget. It never fails to amaze me how people get used to making a certain cell phone, cable or internet payment and don't change their plan when their income decreases. At the very least a quick call to the internet or cable company telling them you need a better deal or you will cancel your service (and meaning it) will knock off a few dollars from your bill each month. It is just simple math that if your pay goes down your expenses must go down too. If that means that your 12 year old can't have a cell phone any more than have the darn thing turned off. If that means that you don't go on a vacation (even over a weekend) until the finances improve then do it. You have to think of your change in finances as if you are on a diet. You have less money to spend so you have to do some belt tightening. It is not fun.....but you can either cut back on expenses, get a second or third job, or start yourself on the road to long-term overspending. I have met with hundreds of people who wish they had chosen option one or two.
Another reason I believe many Hoosiers start long-term overspending (especially in Hamilton County, Indiana where my office is located) is because they are trying to keep up with the Joneses. The cold hard truth of the situation is that you need to ignore the Joneses. This is best done by being happy with the things that you have, realizing that things are not what really what make you happy and just plain telling yourself that the Joneses are probably mortgaged to the hilt and have to use a credit card cash advance to pay their mortgage each month. Most people Hamilton County Indiana (including myself) would agree that they have just about everything that they need and want. It only takes picking up a newspaper to read about the way people in other countries are unable to access clean water, etc., before you realize that you really do have enough stuff. Similarly, I also think most people would agree that it is friends and family that really make you happy...not your brand new water softener. Whenever I watch television shows about people who narrowly escape death they are not talking about how the new couch they bought helped them come up with the mental toughness necessary to find their way out of the situation. They are talking about the fact that they had a wife/husband or children to get back to and that they wanted to see their son's graduation, walk their daughter down the isle at her wedding, etc. The last reason is probably the only way you haven't already thought about as a method for ignoring the Joneses. Just remember that the Joneses are probably full of it. They probably have about $10.00 in the bank each month in order to make the payments on the fancy cars that you drool over every day when you pull out of the driveway. The Joneses might have 2 loans on their 401k savings and no emergency fund. The Joneses probably haven't saved one penny for their little genius that they claim is going to be a Harvard grad some day. The Joneses are probably up at night stressing over how to make the mortgage payment next month. And maybe you are right and the Joneses are sitting on a mint, their house is paid off, they bathe in their money every day before going to bed and sit on a couch made out of money each night when they are watching television. But if you are trying to ignore the Joneses just do yourself a favor and tell yourself that they are broke. If you think to yourself that the Joneses are broke you won't feel the need to keep up with them. You will be better able to concentrate on the great things in your own life and resist the need to overspend just to keep up with them and you won't overspend.
If you are in Hamilton County Indiana or the Indianapolis are and have questions about bankruptcy CALL TO SET UP A FREE INITIAL CONSULTATION 317-575-8222. I am happy to review your situation and make a recommendation in favor of or against bankruptcy for no fee.
Halcomb Singler, LLP, is a debt relief agency. It helps people file for bankruptcy under the bankruptcy code. No attorney-client relationship with the firm of Halcomb Singler, LLP, is created through this blog. Also, please note that Erika Singler is an attorney licensed in Indiana and does not seek to practice law in any jurisdiction in which they are not properly authorized to do so. The information contained in this blog is general in nature and should not be relied upon for the circumstances of any individual(s) or businesses.
Thursday, July 7, 2011
No Indiana Debtor's Prison
When folks have decided to contact me at Halcomb Singler to discuss bankruptcy they are usually at the end of their financial rope. They are stressed out by phone calls, freaked out by threats from creditors and generally unhappy about their financial situation. Some people even afraid that they will be arrested because they are unable to pay their debts.
I can assure you that there is no debtor's prison in Indiana. No one is going to come arrest you because you aren't able to make your credit card or medical bill payment. That does not mean that creditors are without options and will just forget about the debt either. When you owe a creditor money they are typically going to call you a number of times to see if you can make payment on the debt (and sometimes they add in other threats and various insults). They are also going to send you several letters asking you to pay and threatening legal action. If that doesn't work a creditor will normally file a lawsuit. The lawsuit paperwork will be delivered to you via certified mail or via the sheriff (no the sheriff's deputy delivering the paperwork is not going to arrest you when he or she drops off the complaint). When you receive the lawsuit in Indiana you have either 20 or 23 days to answer if the complaint was filed in plenary court. If the complaint was filed in small claims you will need to attend a listed court date.
Once they have received a lawsuit many people do nothing. This is an understandable reaction considering they are likely already stressed out and not sure how to respond to a complaint. If a person who has been sued does nothing the creditor will eventually receive a judgment. In Indiana, once a judgment has been entered the creditor may ask the Court to set a hearing for proceedings supplemental. This is a hearing at which the creditor can ask where you work, where you bank, what assets you own, etc. The important thing about a Court's order setting a hearing for proceedings supplemental is that it will state on the bottom that "FAILURE TO APPEAR MAY RESULT IN A WARRANT BEING ISSUED FOR YOUR ARREST," or something similar to that. If at that time you fail to appear for the hearing and the court's record shows that you were served with notice of the hearing then a warrant may be issued for your arrest, called a writ of body attachment.
Now you are wondering why I said that there is no debtors prison in Indiana when you can have a warrant issued for your arrest for failing to appear at a hearing about a debt owed. It's because no warrant is issued just because you owe money. It is issued because you failed to appear at a hearing that is court-ordered. If you appear at the hearing and have no assets that the creditor can take to satisfy the judgment then you are free to go on your way. The moral of the story is that if you receive a notice setting a court hearing and ordering you to appear you had better appear or receive a continuance of that hearing. Otherwise, you are risking a warrant being issued for your arrest. Normally, law enforcement have more important things to do than go to a person's home who has received a warrant for failing to appear for a civil case, however, if you are pulled over for a traffic stop they will take you to jail. And one time I do remember a person with a body attachment (the name for these warrants) being arrested at his home.
The fact that there is no prison where people who owe debts in inline with United States Bankruptcy law. Overall, in America those who have debt are afforded the opportunity to "hit the reset button" and file bankruptcy in order to receive a fresh start and move on with their lives. While filing bankruptcy should not be done without careful consideration and personalized legal advice, it is not immoral and it is not the end of the world. If you live in Indianapolis, Carmel, Fishers, Tipton, Noblesville, Zionsville or any other suburb of Indianapolis give me a call to set up your free initial consultation at (317) 575-8222. I would be happy to meet with you to discuss whether I believe bankruptcy would be helpful in your situation and to answer any questions you may have about the process.
Halcomb Singler, LLP, is a debt relief agency. It helps people file for bankruptcy under the bankruptcy code. No attorney-client relationship with the firm of Halcomb Singler, LLP, is created through this blog. Also, please note that Erika Singler is an attorney licensed in Indiana and does not seek to practice law in any jurisdiction in which they are not properly authorized to do so. The information contained in this blog is general in nature and should not be relied upon for the circumstances of any individual(s) or businesses.
I can assure you that there is no debtor's prison in Indiana. No one is going to come arrest you because you aren't able to make your credit card or medical bill payment. That does not mean that creditors are without options and will just forget about the debt either. When you owe a creditor money they are typically going to call you a number of times to see if you can make payment on the debt (and sometimes they add in other threats and various insults). They are also going to send you several letters asking you to pay and threatening legal action. If that doesn't work a creditor will normally file a lawsuit. The lawsuit paperwork will be delivered to you via certified mail or via the sheriff (no the sheriff's deputy delivering the paperwork is not going to arrest you when he or she drops off the complaint). When you receive the lawsuit in Indiana you have either 20 or 23 days to answer if the complaint was filed in plenary court. If the complaint was filed in small claims you will need to attend a listed court date.
Once they have received a lawsuit many people do nothing. This is an understandable reaction considering they are likely already stressed out and not sure how to respond to a complaint. If a person who has been sued does nothing the creditor will eventually receive a judgment. In Indiana, once a judgment has been entered the creditor may ask the Court to set a hearing for proceedings supplemental. This is a hearing at which the creditor can ask where you work, where you bank, what assets you own, etc. The important thing about a Court's order setting a hearing for proceedings supplemental is that it will state on the bottom that "FAILURE TO APPEAR MAY RESULT IN A WARRANT BEING ISSUED FOR YOUR ARREST," or something similar to that. If at that time you fail to appear for the hearing and the court's record shows that you were served with notice of the hearing then a warrant may be issued for your arrest, called a writ of body attachment.
Now you are wondering why I said that there is no debtors prison in Indiana when you can have a warrant issued for your arrest for failing to appear at a hearing about a debt owed. It's because no warrant is issued just because you owe money. It is issued because you failed to appear at a hearing that is court-ordered. If you appear at the hearing and have no assets that the creditor can take to satisfy the judgment then you are free to go on your way. The moral of the story is that if you receive a notice setting a court hearing and ordering you to appear you had better appear or receive a continuance of that hearing. Otherwise, you are risking a warrant being issued for your arrest. Normally, law enforcement have more important things to do than go to a person's home who has received a warrant for failing to appear for a civil case, however, if you are pulled over for a traffic stop they will take you to jail. And one time I do remember a person with a body attachment (the name for these warrants) being arrested at his home.
The fact that there is no prison where people who owe debts in inline with United States Bankruptcy law. Overall, in America those who have debt are afforded the opportunity to "hit the reset button" and file bankruptcy in order to receive a fresh start and move on with their lives. While filing bankruptcy should not be done without careful consideration and personalized legal advice, it is not immoral and it is not the end of the world. If you live in Indianapolis, Carmel, Fishers, Tipton, Noblesville, Zionsville or any other suburb of Indianapolis give me a call to set up your free initial consultation at (317) 575-8222. I would be happy to meet with you to discuss whether I believe bankruptcy would be helpful in your situation and to answer any questions you may have about the process.
Halcomb Singler, LLP, is a debt relief agency. It helps people file for bankruptcy under the bankruptcy code. No attorney-client relationship with the firm of Halcomb Singler, LLP, is created through this blog. Also, please note that Erika Singler is an attorney licensed in Indiana and does not seek to practice law in any jurisdiction in which they are not properly authorized to do so. The information contained in this blog is general in nature and should not be relied upon for the circumstances of any individual(s) or businesses.
Tuesday, July 5, 2011
Is it Possible to Buy a House after Bankruptcy?
If I were to make a list of the questions I get during initial consultations with those considering bankruptcy at Halcomb Singler, whether it is possible to buy a house after bankruptcy would easily make the top 5. This is a very good question and one that needs a good answer before people can make an educated decision about whether to proceed with bankruptcy. This question is especially important to those who are planning to surrender their current home in a bankruptcy proceeding.
The answer to the question is yes. However, it is going to take time after one files a bankruptcy before a mortgage company is going to be willing to give a former debtor a mortgage. The best way to qualify for a home loan faster after bankruptcy is to pay all of your post-bankruptcy bills on time. I also remind debtors that the time that it will take after filing bankruptcy to qualify for a mortgage is an excellent time to save up a substantial down payment on their next home. A sizable down payment can help the former debtor avoid some of the financial pitfalls of home ownership such as ending up owing less on the house that it is actually worth.
How long it will typically take a debtor to obtain another home loan depends on what type of bankruptcy has been filed and whether a residence was surrendered in the bankruptcy. If a debtor files a Chapter 13 he or she may be able to qualify for the purchase of a home (with the permission of the Chapter 13 trustee) in as little as 1 year after the filing of the bankruptcy. Remember, this is the low end of the estimate and will not be possible if the debtor has fallen behind on his or her Chapter 13 payments to the trustee.
If the debtor filed a Chapter 7 and reaffirmed (kept and continued to make payments toward the mortgage) their home, then it may be possible for him to qualify for a mortgage as little as 2 years after the discharge of the Chapter 7 bankruptcy. On the other hand, if the Chapter 7 debtor surrendered his home in a Chapter 7 bankruptcy then it will likely be at least 3 years from the sheriff sale of the surrendered house before a mortgage loan can be obtained. Note that a sheriff sale is not the date of the discharge of the bankruptcy, but the end of the mortgage foreclosure case, which is often after the bankruptcy discharge.
Please keep in mind that the above-referenced waiting periods are only guidelines and they are certainly subject to change. In addition, these guidelines are not based on codified law. They are simply a rule of thumb. Just as every bankruptcy is different, so is every mortgage loan. For that reason I typically encourage debtors to meet with a mortgage broker to review their situation and give them advice on this issue that is specific to their situation.
Call me at Halcomb Singler if you live in Indianapolis, Carmel, Noblesville, Fishers, Zionsville or anywhere else in the greater Indianapolis area at 317-575-8222 or just click here. I will meet with you personally to review your financial situation, give my recommendation for or against bankruptcy and answer your questions about bankruptcy without a fee.
Halcomb Singler, LLP, is a debt relief agency. It helps people file for bankruptcy under the bankruptcy code. No attorney-client relationship with the firm of Halcomb Singler, LLP, is created through this blog. Also, please note that Erika Singler is an attorney licensed in Indiana and does not seek to practice law in any jurisdiction in which they are not properly authorized to do so. The information contained in this blog is general in nature and should not be relied upon for the circumstances of any individual(s) or businesses.
The answer to the question is yes. However, it is going to take time after one files a bankruptcy before a mortgage company is going to be willing to give a former debtor a mortgage. The best way to qualify for a home loan faster after bankruptcy is to pay all of your post-bankruptcy bills on time. I also remind debtors that the time that it will take after filing bankruptcy to qualify for a mortgage is an excellent time to save up a substantial down payment on their next home. A sizable down payment can help the former debtor avoid some of the financial pitfalls of home ownership such as ending up owing less on the house that it is actually worth.
How long it will typically take a debtor to obtain another home loan depends on what type of bankruptcy has been filed and whether a residence was surrendered in the bankruptcy. If a debtor files a Chapter 13 he or she may be able to qualify for the purchase of a home (with the permission of the Chapter 13 trustee) in as little as 1 year after the filing of the bankruptcy. Remember, this is the low end of the estimate and will not be possible if the debtor has fallen behind on his or her Chapter 13 payments to the trustee.
If the debtor filed a Chapter 7 and reaffirmed (kept and continued to make payments toward the mortgage) their home, then it may be possible for him to qualify for a mortgage as little as 2 years after the discharge of the Chapter 7 bankruptcy. On the other hand, if the Chapter 7 debtor surrendered his home in a Chapter 7 bankruptcy then it will likely be at least 3 years from the sheriff sale of the surrendered house before a mortgage loan can be obtained. Note that a sheriff sale is not the date of the discharge of the bankruptcy, but the end of the mortgage foreclosure case, which is often after the bankruptcy discharge.
Please keep in mind that the above-referenced waiting periods are only guidelines and they are certainly subject to change. In addition, these guidelines are not based on codified law. They are simply a rule of thumb. Just as every bankruptcy is different, so is every mortgage loan. For that reason I typically encourage debtors to meet with a mortgage broker to review their situation and give them advice on this issue that is specific to their situation.
Call me at Halcomb Singler if you live in Indianapolis, Carmel, Noblesville, Fishers, Zionsville or anywhere else in the greater Indianapolis area at 317-575-8222 or just click here. I will meet with you personally to review your financial situation, give my recommendation for or against bankruptcy and answer your questions about bankruptcy without a fee.
Halcomb Singler, LLP, is a debt relief agency. It helps people file for bankruptcy under the bankruptcy code. No attorney-client relationship with the firm of Halcomb Singler, LLP, is created through this blog. Also, please note that Erika Singler is an attorney licensed in Indiana and does not seek to practice law in any jurisdiction in which they are not properly authorized to do so. The information contained in this blog is general in nature and should not be relied upon for the circumstances of any individual(s) or businesses.
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