Bankruptcy is a legal procedure allowing a person or business to have their debts discharged, in part or in whole. It is usually treated as a last resort, because, while it can prevent financial catastrophe, it has some major 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 Lebanon, Indiana bankruptcy lawyer beforehand.
Chapter 7 Bankruptcy in Lebanon, Indiana
There are 2 common types of bankruptcy in Lebanon, 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 usually 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 discharged. 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 Lebanon, Indiana debts are not dischargeable, you might want to consider options other than bankruptcy.
Chapter 13 Bankruptcy in Lebanon, Indiana
Chapter 13 Bankruptcy in Lebanon, Indiana is very different from Chapter 7. Whether or not it is a better option is highly dependent on the facts of each individual case. Chapter 13 does not discharge debt, but restructures it instead. Usually, 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 usually manageable, as long as the debtor can make some sacrifices.
Which Type of Consumer Bankruptcy Should I File in Lebanon, Indiana
Whether Chapter 7 or Chapter 13 is the right choice for you depends heavily on your individual situation. If you have a steady income stream, and a lot of non-exempt property, Chapter 13 might be right for you. If you don't have a steady income, and most of your property is exempt, Chapter 7 might be a better way to go.
Regardless of your situation, you should speak with an attorney in Lebanon, Indiana who is experienced in bankruptcy before making a decision. They will be able to advise you of your options, and the likely consequences of each one, allowing you to make a much more informed decision.