Is the Worst Part of Indiana Bankruptcy the Amount of Paperwork?

            I often find myself telling bankruptcy clients at Halcomb Singler, LLP, that one of the most painful parts of bankruptcy is getting together all of the paperwork that will be required.  When clients come to meet with me and decide to move forward to file bankruptcy I give them a checklist of documents that I will need to complete their bankruptcy petition.

            Most of the time my clients return with 75% of the required documents....but rarely all of them.  I am the first to admit that it is a bit of a pain to gather these documents.  And sometimes people need to drop them off or e-mail them to over a period of time.  Other times clients assume that when I ask for the last 6 months of pay check stubs that their last W-2 will do the trick.  Unfortunately, they are wrong.  If a document is on the list then I do need it to either prepare the petition or to file with the court along with the bankruptcy petition.  Trust me when I tell you that bankruptcy attorneys have enough paper in their office and wouldn't ask you for documents if they weren't necessary to complete your bankruptcy petition.  These documents are essential for your attorney to make sure that you petition is filed correctly and that your bankruptcy case proceeds as smoothly as possible.  You can help by getting all of the information your attorney requests back to him or her at one time and by writing down any miscellaneous information your attorney has requested.  Keep in mind that your case is important to the attorney, but the chances of your attorney remembering every detail of your case if it isn't written down is slim.  Most bankruptcy attorneys are constantly working on many cases and cannot recall every detail of your case from memory.

            The need for you to save documents and provide them to your attorney doesn't end after you have turned in those initial documents.  For example, in either a Chapter 7 or Chapter 13 bankruptcy it is necessary for your attorney to calculate your last six (6) months income.  Of course, for each month that goes by that your petition is not filed that means that your attorney will need another month of pay stubs.  In addition, you should save the bills you receive in the mail and provide updated copies to your attorney, especially if they have recently been turned over to collections agencies.

          Yes.  The amount of paper that must be tracked down to file bankruptcy is annoying.  But by providing the necessary documents to your attorney you can make your bankruptcy proceed without any unforeseen issues.  And, since your attorney cannot file your petition without all of the necessary documents; your petition will also be filed sooner so that you can get your discharge.
If you live in the Indianapolis, Carmel, Tipton, Zionsville, Kokomo, Noblesville, or Fishers area and want to speak with a bankruptcy attorney call our office at 317-575-8222 or click here.  There is no fee for the consultation and I am happy to answer your questions and discuss whether or not bankruptcy makes sense for you.

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.

       

Indiana Bankruptcy for the Elderly?

            None of us picture financial worry in our golden years.  If you are anything like me you picture yourself sitting in a beach chair sipping a fruity drink without a care in the world.  Unfortunately, this is just not reality for some senior citizens.  I have met with plenty of seniors at Halcomb Singler who are struggling with a fixed income and mounting debts.  I have also gotten calls from adult children concerned with the financial situation of their parents wondering if it would make sense to file a Chapter 7 Bankruptcy, but I need to meet with the person who is actually considering filing bankruptcy.

            Ultimately, it is a reality that some seniors need to file bankruptcy.  However, whether bankruptcy is the correct path depends on the senior.  One of the most common scenarios I come across is where a senior has no income outside of social security and a small pension.  Typically the senior does not own his or her home and does not have any other significant assets.  At the same time that senior has gotten into trouble with credit and has received several lawsuits.  In Indiana there is not much a credit card company can do to collect from that senior.  A credit card company cannot garnish a pension or social security.  However, the senior can be made to appear in court from time to time to answer questions regarding his or her income/assets.  In this situation it is common for me to tell the senior that there is really no need to file bankruptcy because the senior has little if nothing that the creditor can take. It seems pointless to pay a bankruptcy attorney to file a bankruptcy to protect the senior when the senior is already judgment proof.  The caveat I typically give is that a bankruptcy may be an option if the senior is very afraid of having to appear in court.  Although these proceedings, in my opinion, are very straightforward and simple, not every senior agrees with me.  For some seniors the idea of going to court and having to answer questions about income and assets coming from a stranger (the attorney for the credit card company) is just about the worst thing they can imagine.  For those seniors the finality of filing bankruptcy is sometimes a better option than appearing at court proceedings.  While for others that have a thicker skin they would prefer not to file bankruptcy and realize that since they do not have any garnishable income or attachable assets that there is nothing to fear.

            On the other hand, some seniors are now finding themselves in a position where they need to continue working in order to make ends meet much longer than they had hoped.  For those seniors who are still working bankruptcy may be an option as it can prevent them from having their wages garnished in the event of a lawsuit.  In Indiana a judgment creditor can garnish up to 25% of your take home pay so long as you make a minimum amount (I believe it's about $300.00 per week).  If the 25% is a big enough chunk of money out of the senior's pay check that without it he or she will not be able to meet minimum living expenses it may make sense to file bankruptcy.

           A final fact scenario I see commonly is the senior that owns his or her home outright, but has accumulated significant debt over the years.  Unless the home is worth very, very little, a Chapter 7 bankruptcy is not going to be the answer.  The reason for this is that the senior would likely have to surrender the home to the bankruptcy trustee for it to be sold and the non-exempt portion to be distributed to creditors.  Depending on the value of the home and whether the senior has any disposable income at the end of each month, a Chapter 13 bankruptcy may be appropriate.  However, it is often the case that bankruptcy is not a viable option when a senior owns his or her house outright.  Sometimes there is simply too much equity in the house to protect.  In these situations payment plans with the creditors or potentially taking out a mortgage on the home to pay off debt can be viable options.

            As you can see, no one situation involving debt and people is the same.  But since the elderly tend to have less income from work and more from social security and other protected sources it typically makes less sense for them to file bankruptcy.  However, this is an overgeneralization and any person concerned about debt and considering bankruptcy should meet with a bankruptcy attorney practicing in their area.  If you live in the Indianapolis, Carmel, Tipton, Zionsville, Kokomo, Noblesville, or Fishers area and want to speak with a bankruptcy attorney call our office at 317-575-8222 or click here.  There is no fee for the consultation and I am happy to answer your questions and discuss whether or not bankruptcy makes sense for you.

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.

Is it a Good Idea to have a Bankruptcy Preparer complete your Bankruptcy Petition?

           My inspiration for this blog occurred earlier this week when I was attending a 341 hearing with some clients who had filed Chapter 7 bankruptcy in the Southern District of Indiana in Indianapolis.  As often occurs at 341 bankruptcy hearings, my clients and I had to wait for their names to be called and had a chance to observe a few hearings.  One of the bankruptcy debtors who was called prior to my clients was pro se, meaning he filed his bankruptcy petition without the assistance of an attorney.

           There is absolutely no requirement that anyone who files bankruptcy have an attorney.  However, this hearing was interesting to me because the debtor testified that he looked up bankruptcy in the phone book and called who he though was an attorney to assist him with his bankruptcy.  It was not until after his bankruptcy petition had been filed that he found out the person assisting him was not an attorney, but was a bankruptcy petition preparer.  A bankruptcy petition preparer is a person who simply fills out the bankruptcy forms for a debtor.  A bankruptcy petition preparer is not allowed to give any legal advice because they are not licensed to practice law.  A bankruptcy petition preparer cannot go to the 341 hearing with the pro se debtor....the debtor appears at that hearing alone.  Click here for the US Bankruptcy Court's warning about some bankruptcy preparers.

          In the case earlier this week it was clear that the petition was not filed properly.  The debtor's hearing took about 20 minutes, which is fairly long for the typical Chapter 7 case.  It is more common for them to take about 5 minutes.  On top some amendments (changes) to the petition that the trustee required, the debtor learned that he would need to turn over a portion of his income tax refund and testified that the bankruptcy petition preparer had advised him the refund would not be claimed by the trustee.  In the end, the trustee also continued the debtor's 341 hearing, meaning that if the changes the trustee required were not done the debtor would be required to return for a second 341 hearing.

         I can't recall exactly how much the pro se debtor at that hearing testified he paid the bankruptcy petition preparer, but I believe he said it was about $500.00 plus the filing fee of $306.00.  I found this to be sad because by the time you factor in the amount the pro se debtor paid to the bankruptcy petition preparer, plus the amount the pro se debtor will have to turn over to the trustee, plus the amount the pro se debtor will likely need to pay a bankruptcy attorney to fix the petition he is almost certainly paying more than if he had hired a bankruptcy attorney from the start.

       The bottom line is that unless you are confident in your ability to file a bankruptcy petition based on your own knowledge and research proceed with caution in deciding to complete bankruptcy through a bankruptcy petition preparer.  A bankruptcy petition preparer is only a person who fills in forms based on information you provide and cannot give you legal advice.  There is a reason attorneys go to college for 4 years, then law school for 3 years, then have to have a character and fitness to practice law evaluation, must pass a test about ethics in the law, and then pass a bar examination that allows them a license to practice law.  The reason is that poor legal advice can have real negative impacts on peoples' lives.  Bankruptcy petition preparers are no doubt going to be less expensive than an attorney....but they also know less, are not licensed and are not authorized to practice law.  In addition, most bankruptcy attorneys I know (including myself) have payment plans than can make bankruptcy with an attorney possible for most people.

       I also offer one free initial consultation at Halcomb Singler for those thinking about the need to file bankruptcy.  At this meeting I can answer questions regarding bankruptcy and let you know whether or not I believe you are a good candidate for bankruptcy.  At the end of your consultation if I believe you could benefit from bankruptcy I will quote you a flat fee and explain our payment plan.  Whether you file bankruptcy and whether or not you select me as your attorney is up to you.  If you would like to schedule a free initial consultation call (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.

Is it immoral to file for Bankruptcy?

            I'm sure that is no secret that I do not believe it is immoral to file bankruptcy.  I have filed many Chapter 7 and Chapter 13 bankruptcies on behalf of clients in Indiana.  As a result, I cannot say I believe it is immoral to file bankruptcy so long as you are unable to pay your debts and complete your bankruptcy petition truthfully.  But since so many of the people I meet with at Halcomb Singler have moral objections to bankruptcy I wanted to delve further into why I do not believe bankruptcy is a moral issue in most circumstances.

           I have said it before and I'm sure I'll say it again, if you can pay your bills and avoid filing bankruptcy then do it.  Truth be told those who can pay their bills and not having financial difficulties rarely want to discuss bankruptcy.  It is no secret that people want to avoid filing bankruptcy, and that is a good thing.  If everyone in our country filed bankruptcy at every possible opportunity interest rates would be through the roof and it would be very difficult to obtain credit.  But there is also no denying that bankruptcy is an essential part of our society.  Things happen that make it impossible for debtors to pay their bills and creditors build the cost of bankruptcy into their prices as part of the cost of doing business.

        Don't let your perception of morality prevent you from seeking the advice of a qualified bankruptcy attorney.  Lets go back to when you took out a credit card that you are now unable to pay.  If you are like most of my clients you opened the card years ago and used it for incidental expenses.  For years you paid off the credit card at the end of the month or carried a small balance.  Over time the balance grew and grew slowly and then a major event such as unemployment or illness pushed you over the edge and now you are choosing between paying your electric bill and providing groceries and paying the credit card company's monthly payment.  Since you realized you wouldn't be able to pay the monthly payment you called the credit card company to see if you could pay a smaller payment in good faith, but were surprised to hear that unless you stop paying the card payment for several months then the company won't consider reducing the payments.

        Now that I have taken you through a common scenario from a potential bankruptcy client's perspective, lets go through the perspective of the credit card company.  The company sent you an offer for a credit card several years ago.  You filled out the application and sent it back and the credit card company approved your application, sent you a card in the mail and set a credit limit for your card.  The credit card company assigned your account an interest rate and sent you a bill each month.  Over the years you paid the credit card company interest each and every time you carried a balance.  The credit card company continued to check your credit from time to time to make sure you weren't a significant credit risk.  If the credit card company thought you were becoming a credit risk they decreased your credit limit.  If the credit card company saw that you got behind on other payments they likely increased your interest rate.  When you did have a problem paying and called to work out arrangements they told you not to even bother sending in a partial payment.

           Do you know why the credit card company does this?  It's because they are a business and have a responsibility to their shareholders to make money.  Every step the credit card company took in their process was aimed at making money.  They approved you for a credit card with the mathematical expectation based on your credit history and income that you would carry a balance and also make you minimum payment forever.  That is how the credit card makes the most money.  They approved you for a credit card hoping that you would be their slave and give them a way to make an easy 10% on their money when most savings accounts are paying .4% interest.

           Now lets go back to the prospective of a debtor again and why I don't believe that filing bankruptcy is a moral issue.  At no point did you give a blood oath to the credit card company that you would pay them back or die trying.  At the time you signed the credit card agreement you calculated that you could afford to make a credit card payment and factored your income and expenses into making the determination you could pay.  Once the information you relied on to complete your credit card application was no longer the same as when you completed the application you were no longer able to make the payment.  Now it's time for you to make a calculation.  You either have enough money to make the credit card payment after providing food, shelter, and other basic necessities for you and your family.  If you have the money left to make the credit car payment do it.  If you don't have the money to make the credit card payment then don't.  You can't pay what you can't pay.  This is nothing more than a math problem.

          I am not saying that you shouldn't do anything else to try to stay current on your bills.  My blog postings are often about cutting expenses and increasing income through getting second or third jobs, but in my opinion, whether you can make the payment is a math problem and not a moral problem.  Stop beating yourself up if your math problem comes up short and you see no way to solve the problem.  Meet with a bankruptcy attorney in your area to discuss your options.  If you live in Noblesville, Indianapolis, Carmel, Fishers, Tipton, Kokomo, Anderson or any of the surrounding areas and would like to meet with me at Halcomb Singler to discuss options in filing or avoiding bankruptcy call us at 317-575-8222 or click here and we will contact you for an appointment.

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.

If Mortgage Modification Fails Bankruptcy May be an Option

           People generally understand how to attack their debts.  Lets be honest.  It is not rocket science to set out a budget and stick to it.  Many of the people I meet with at Halcomb Singler, LLP have contacted creditors to let them know the payment is not in the mail in an attempt to negotiate an acceptable and affordable payment plan.  It is also common for a potential client to tell me that they are in the midst of a mortgage modification with the lender on their home.  Often the potential client has submitted documents again and again to the loss mitigation department of their home lender.  Each time another letter comes in the mail asking for the same things again and again with no answer regarding whether the homeowner qualifies for the mortgage lender's modification program.

            Here's the good news.  I have seen clients receive mortgage modifications.  Sometimes this allows them to avoid filing bankruptcy and sometimes it is still necessary to file bankruptcy, but the new lower payment insures that the house will be affordable after the bankruptcy.  Additionally, in Indiana when your lender files a mortgage foreclosure you are entitled to request a settlement conference with the lender prior to the entry of a judgment if the house is your primary residence.  In some cases the homeowner is able to reach an agreement with the mortgage company that makes sense for both parties.

          Unfortunately, that's the end of the good news.....for now.  But keep reading future posts because I am hoping that mortgage companies might be exercising the common sense that my clients have complained about for years.  Specifically, clients always tell me that they don't understand why the mortgage company won't work with them.  Why would the mortgage company want more houses??  I couldn't agree more.  It seems to me that there is no business-oriented reason that mortgage companies would not prefer to obtain a payment and interest from a client rather than to sit on yet another home in this lackluster real estate market.

          A few weeks ago I read an article about mortgage companies offering homeowners substantial cash payouts to executed a deed in lieu of foreclosure.  A deed in lieu of foreclosure typically relieves a homeowner of liability for the mortgage and transfers ownership of the house to the bank.  The story followed a homeowner who had received $30,000.00 to move out of her house and deed it bak to the bank.  Let me be clear.  Other than in the article I have never heard of this happening.  I am hoping that the article was factually correct, but I cannot be sure.  But the article did give me hope that potentially there MIGHT be some reason to believe that banks are seeing the light and beginning to realize that they should use smart business to deal with the numerous foreclosures they are seeing.  Only time will tell if anything has actually changed regarding the way banks handle their mortgage foreclosures/homeowners who fall behind on their mortgages.

           Even in light of this small potential bright spot, I urge homeowners not to hold their breath to see if they receive a letter from their mortgage lender promising cash for a deed in lieu.....and even if they did make sure you see an attorney to make sure that the agreement you sign actually reflects your understanding of the agreement.  I would urge homeowners to operate under the impression that their bank will do nothing to assist them with their mortgage arrearage and then to be pleasantly surprised in the event the bank is helpful.  Don't wait until the last minute to seek legal advice regarding a bankruptcy or mortgage foreclosure because even though a bankruptcy can be filed to stop a sheriff sale, potential arguments in a mortgage foreclosure case can be barred after too much time has passed.

         If you live in Indianapolis, Carmel, Tipton, Zionsville, Fishers, Noblesville or the surrounding areas and would like to set up a free initial consultation with me regarding bankruptcy and whether it may be helpful to your home mortgage situation feel free to click here or call Halcomb Singler at 317-575-8222 for an appointment.

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.