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How Chapter 13 Bankruptcy Works in Indiana

— May 20, 2022

You may be considering filing bankruptcy in Indiana due to unexpected hardship. You are not alone when considering bankruptcy. 

Furthermore, the purpose of this article is it to show you to the primary aspects of Chapter 13 bankruptcy in Indiana. You might ask why we are putting so much emphasis on Chapter 13 bankruptcy in Indiana. Well, Indiana is the main focus of this article because some bankruptcy aspects are more relevant to Indiana while others concentrate on the nation at large. In this article, we will cover the following:

  • Chapter 7 vs Chapter 13 Bankruptcy in Indiana
  • Chapter 13 Bankruptcy Plan Payment in Indiana
  • Indiana Bankruptcy Exemptions
  • Bankruptcy Trustees in Indiana
  • Indiana Bankruptcy Districts and Court Locations
  • Should I File a Chapter 13 Bankruptcy in Indiana?

Chapter 7 vs Chapter 13 Bankruptcy Indiana

We’ll look at Indiana-specific aspects of Chapter 13 bankruptcy but before that, let us dig deeper into Chapter 13 bankruptcy in Indiana and the core differences with Chapter 7 bankruptcy in Indiana.

Understanding Chapter 13 Bankruptcy:

Also known as ‘wage earners bankruptcy’ and in this type of bankruptcy, debtors acknowledge their debts and promise to pay via installment method ranging from 36 to 60 months. Payment is made monthly, and attorneys usually come in handy in this process, but why do the majority of people with debts prefer Chapter 13? Well, in such cases, their income might be way too high to file for Chapter 13, and in others, they might possess valuable property.

Understanding Chapter 7 Bankruptcy:

This is also known as ‘liquidation bankruptcy under the bankruptcy code‘, and it is ideal for debtors who are unable to pay their debts; therefore, they opt for Chapter 7 to try and discharge the debts. As long as you qualify for Chapter 7, the process can be over in three months, and it will cost you less.  The calculator shown below can come in handy to get an estimate of your Chapter 13 payment plan and know whether you qualify for Chapter 7.

By this point, we believe you can tell the difference between Chapter 7 and Chapter 13, so let’s look at Chapter 13 bankruptcy in Indiana.

Chapter 13 Bankruptcy Plan Payment in Indiana

To start, the first step is to estimate your potential Chapter 13 payment plan. Note that the Chapter 13 bankruptcy Indiana payment arrangement estimate shown here factors in the particular Indiana expenditures, plus the IRS National expense figures. Some of these Indiana expenses include the Indiana administrative expense multiplier and the Indiana bankruptcy allowable living expenses. 

We understand that many people can’t wait to know whether they qualify for Chapter 13 and the kind of payment plan they would get if they were to opt for Chapter 13. It is good to remember that a precise self-estimation of Chapter 13 bankruptcy arrangement payment can be a hard nut to crack because of the complex bankruptcy forms you have to fill.

A common question is, “how much does it cost to file bankruptcy in Indiana?” So, the filing fee is $313 for a Chapter 13 bankruptcy, and a Chapter 13 bankruptcy attorney in Indiana will most likely charge around $3500 in attorney fees.  You may pay some attorney fees in the plan and potentially some upfront.

Calculating You Chapter 13 Payment in Indiana

A Chapter 13 calculator can help you estimate the monthly cost of a Chapter 13 bankruptcy. You will also be able to estimate the all-in costs and fees and compare pros and cons of different debt relief options.

Indiana Means Testing

Furthermore, the calculator appearing above considers Indiana means test data shown to estimate your Chapter 7 eligibility. In the table, you can also view the particulars for the Indiana Means Test for cases filed on cases filed in 2022. You may keep in mind that after a certain household size, the allowable increases by $9,000 per household member.

Indiana Bankruptcy Exemptions

Before pursuing bankruptcy, find out if you possess any property that is above the Indiana bankruptcy exemption. Although you might be a suitable candidate for Chapter 7, owning a considerable equity position in properties makes you better suited for Chapter 13 or debt settlement.

When you file for bankruptcy, remember that Indiana has particular bankruptcy exemptions and statutes that should be considered. If your assets are higher than Indiana exemptions, you can face liquidation. Here, we have a detailed list of Indiana Bankruptcy exemptions.

Bankruptcy Trustees in Indiana

For example, the trustee’s primary responsibility is mainly to liquidate the debtor’s nonexempt property and regulate the bankruptcy process. You’ll find that there many Chapter 7 trustees in Indiana but not as many Chapter 13 trustees in Indiana.

Indiana Bankruptcy Court Locations and Districts

Graphic of gavel on polished desk; image by Vanna44, via
Graphic of gavel on polished desk; image by Vanna44, via

There are two bankruptcy districts in Indiana: Northern Bankruptcy District Indiana and Southern Bankruptcy District Indiana. Let’s dig into each district.

Northern Bankruptcy District Indiana

There are four bankruptcy court locations in the Northern District of Indiana. You may want to observe the local rules and the general orders for this district. Here’s the information for the courts below.

  • South Bend Bankruptcy Court
  • Fort Wayne Bankruptcy Court
  • Hammond Bankruptcy Court
  • Lafayette Bankruptcy Court

Southern Bankruptcy District Indiana

There are are also four bankruptcy court locations in the Southern Bankruptcy District of Indiana. You may want to observe the local rules and local forms. Your attorney may have knowledge of these as well. Here’s the information for each court.

  • Evansville Bankruptcy Court
  • Indianapolis Bankruptcy Court
  • New Albany Bankruptcy Court
  • Terre Haute Bankruptcy Court

Is pursuing a Chapter 13 Bankruptcy in Indiana My Best Option? 

If debts swamp you, do not prefer Chapter 7, or you’re not eligible, you can go for Chapter 13 bankruptcy. Chapter 7 vs Chapter 13 have various pros and cons. Bankruptcy aside, other alternatives include debt management and debt settlement. Before making up your mind, you may want to factor in the bankruptcy pros and cons in addition to the other debt-relief options.

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