What Is Bankruptcy in Indiana?

If you live in the Hoosier State and cannot pay your bills as promised, you might need to file bankruptcy in Indiana. Any type of non-traditional debt relief is a serious proposition that can negatively impact your credit rating. However, most people who file bankruptcy in Indiana do not regret it because of the immense financial relief a properly executed case offers.

Chapter 7 is the closest concept to a total bankruptcy. But you generally must earn no more than the Hoosier State’s annual median income level. If you are a single Indiana resident, you can earn up to $41,236 a year and as of 2013 still declare Chapter 7. The annual median income level for a couple is $51,551, while the figure for a four-person Hoosier State household is $69,328. As of 2013, it cost $306 to file Chapter 7.

If you earn too much money to file Chapter 7, you have three options.

1. You can complete a federally-devised means testing worksheet and attempt to prove that you cannot reasonably be expected to repay your creditors while covering basic living expenses. If a court trustee accepts your explanation, you can then file Chapter 7 bankruptcy in Indiana.
2. You can request to repay part of your bills in a Chapter 13 case. It typically takes three to five years to finish this type of repayment plan. As of 2013, it cost $281 to file Chapter 13 bankruptcy in Indiana.
3. You can forego filing bankruptcy. Some people choose to avoid paying their credit card bills, while others request a hardship program from the lender. Reputable credit counseling companies can often work with you to create a partial debt repayment plan that is similar to Chapter 13.

If you have lived in the Hoosier State for at least two years, you can invoke state asset exemption laws to protect some of your property. As of 2013, a single person could keep up to $17,600 of real estate equity; that amount doubles for married couples filing bankruptcy in Indiana. A wild card exemption could enable you to keep an additional $9,350 of real estate equity or general personal property. Again, the amount is doubled for married couples filing bankruptcy in Indiana.

If you are filing bankruptcy as an individual and not as a corporation owner, you do not have to hire an attorney to handle your case. However, keep in mind that the hundreds of dollars you pay a qualified bankruptcy lawyer may save you a lot of trouble in the long run.