Bankruptcy is a legal procedure allowing a person or business to have their debts excused, in part or in whole. It is typically treated as a last resort, because, while it can prevent financial catastrophe, it has some influential long-term consequences. This warrants careful consideration of the costs and benefits. Bankruptcy is governed by federal law and handled in federal courts, so the procedural and substantive rules involved in Indiana are often the same as anywhere else in the U.S. However, individual bankruptcy courts have slightly different rules for items such as exemptions, so it would be a good idea to consult with a local Lawrenceburg, Indiana bankruptcy lawyer beforehand.
Chapter 7 Bankruptcy in Lawrenceburg, Indiana
There are 2 typical types of bankruptcy in Lawrenceburg, Indiana. They are known as Chapter 7 and Chapter 13 Bankruptcy. Chapter 7 involves liquidation of some of a debtor's assets. It requires that a certain percentage of the debtor's property to be sold to pay off as much debt as possible. The majority of property that most people own, however, is exempt. This typically includes homes, vehicles, retirement accounts, and others. These are not available to creditors.
Once all non-exempt assets are sold, and the money from the sales turned over to the creditors, most remaining debt is excused. But some types of debt cannot be discharged through Chapter 7 bankruptcy. These include child support payments, student loans, and criminal fines, among others. If most of your Lawrenceburg, Indiana debts are not dischargeable, you might want to consider options other than bankruptcy.
Chapter 13 Bankruptcy in Lawrenceburg, Indiana
Chapter 13 Bankruptcy in Lawrenceburg, Indiana is very different from Chapter 7. Whether or not it is a better option is highly dependent on the facts of each distinct case. Chapter 13 does not excuse debt, but restructures it instead. Typically, various debts are consolidated into a single monthly payment. This is designed to make the debt more manageable, giving the debtor the chance to pay off the debt over a longer period of time, without all of it coming due at once. This is typically manageable, as long as the debtor can make some sacrifices.
Which Type of Consumer Bankruptcy Should I File in Lawrenceburg, Indiana
This depends entirely on the facts of your specific case. If you have a decent amount of steady income, and a large amount of non-exempt property which you don't want to part with, Chapter 13 might be the best option for you. If most of your property is exempt, and you don't have much steady income, Chapter 7 might be the best option.
In any case, you should talk with a local Lawrenceburg, Indiana bankruptcy attorney. Your attorney can advise you of your options and inform you of their likely result. This will make it much easier for your to make an informed choice.