There are many ways of dealing with a huge debt burden. If you have a lot of debt that you would like to get rid of, you may consider refinancing or consolidating the debt. Alternatively, you can decide to file for bankruptcy. There are three bankruptcy options that Indiana residents can consider.
There is Chapter 7, which both individual and corporate debtors can use; it basically provides for liquidation of property to pay off debts and can be completed in a matter of months. The second option is Chapter 11, which is meant for businesses and other legal entities. The last bankruptcy option is Chapter 13, which is specifically designed for individual consumers and provides for debt restructuring, as opposed to liquidation of assets to pay off debts.
Filing for Bankruptcy
When thinking about bankruptcy, many people often wonder if they’ll lose their house if they file bankruptcy in Indiana. It depends on the type of bankruptcy you choose to file. Debtors with an unreliable or low income, with too much bad debt, can only qualify for Chapter 7 because they cannot service their debts through an improved payment plan. Those with a significant income can have their debts forgiven through Chapter 13, which allows the debtor to make regular monthly payments for a few years to get debt forgiveness.
If you seek bankruptcy protections under Chapter 7, a trustee will be appointed to liquidate your estate. The trustee will organize a public auction to sell all non-exempt assets. While there are some federal and state exemptions, none of them make it possible for you to retain your home after the bankruptcy. After all, it is your biggest asset, especially if you have significant equity in the home. That said, if you file for bankruptcy under Chapter 7 in Indiana, you will lose your home. Therefore, if you want to keep your home, consider getting a better job and file for bankruptcy under Chapter 13.
If you have a meaningful job with a decent income, you may be able to afford a payment plan. After filing for bankruptcy under Chapter 13, you will need to draft and present a decent payment plan to your creditors. Once approved, you will get the court’s protection from your creditors. Even if you had defaulted on your mortgage payments, a Chapter 13 filing will temporarily halt foreclosure, which means you can retain your home. Since no assets are sold in Chapter 13 to pay off debts, you can be assured of retaining all your assets, including your home. In short, you cannot lose your house if you file for bankruptcy under Chapter 13 in Indiana. Be sure to consult a competent bankruptcy lawyer in Vigo County, IN before filing any paperwork.