Chapter 7 bankruptcies generally last four months from filing the petition to discharge. Sometimes a trustee will hold a case open to collect tax refunds or non-exempt property, but you will still receive your discharge four months from filing the petition.

For individuals filing chapter 7 bankruptcy, Indiana law allows them to keep $19,300 in equity in a home, $10,250 worth of personal property, and $400 in cash at the time of filing. These amounts are doubled for married couples filing jointly. Keep in mind though that personal property is not valued at retail prices, but rather what a willing buyer would pay for them (often garage-sale or Craigslist prices). This is how many filers are about to keep all of their property in a bankruptcy.

Yes. First, you cannot have received a discharge in a chapter 7 bankruptcy filed 8 years prior to your new case. Second, filers must first pass the “means test”; meaning their annualized income is at-or-below the state median income. Don’t let this discourage you though. Median income varies with household size and location. The means test also takes into account certain IRS living allowances like car payments, withholding, healthcare, and childcare. This could ultimately allow you to be eligible for a chapter 7 bankruptcy even if your income is over the median for central Indiana.

No. There is no minimum amount of debt required to file chapter 7 bankruptcy. Nor is there a maximum amount of debt that can be included in a chapter 7 bankruptcy.

Yes. In most cases, filers in a chapter 7 bankruptcy either owe more than what the property is worth or their interest in the property is exempt. This means that the trustee will not take the property. BUT, you should be current on the payments. If not, lenders may request the bankruptcy court terminate the special protections afforded by bankruptcy and either repossess the property or sue you.

As I guide filers from start-to-finish, my fee for a chapter 7 bankruptcy is a flat $1,500 regardless of whether it is a single or joint filing (while rare, contested matters are billed on an hourly basis). This amount can paid in installments. To keep things simple, this amount includes the court’s filing fee of $335 and the cost of obtaining your credit reports electronically (which saves you time and a ream of paper). One thing to keep in mind – fees can vary from attorney-to-attorney. When searching for an attorney, always ask what services the fee covers.

Chapter 13 bankruptcies can last upwards of 60 months. The actual plan period depends on a variety of factors: whether the filer is above or below the median income, their disposable monthly income, amount of non-exempt property, and amount of claims filed by creditors in the case. So, while a plan may initially propose payments from 36 to 60 months, it’s quite possible for a chapter 13 bankruptcy to end much earlier.

All of your property! That’s one of the benefits of a chapter 13 bankruptcy. Since filers are proposing a plan to repay some or all of their debt using their disposable income, they are allowed to keep their property.

Yes. A chapter 13 bankruptcy will stop a foreclosure or repossession provided that the arrearage is addressed and funded in a chapter 13 plan. Not only can it halt a sheriff’s sale or force a lender to return a car, but chapter 13 bankruptcy allows filers an opportunity to catch up on their past-due payments. These payments can be stretched out over 60 months.

There are limits on the amount of debt included in a chapter 13. Filers must owe less that $307,675 in unsecured debt (credit cards, medical bills, utility bills) and less than $922,975 in secured debt (mortgage, car loans, title loans). A discharge won’t be granted if the filer received a discharge in chapter 7 bankruptcy within four years of filing or a discharge in a chapter 13 bankruptcy two years before filing the new case.

A discharge is entered upon the successful completion of the chapter 13 plan. You are then relieved of any further liability for any unsecured debt (credit cards, medical bills, utility bills, etc.) left unpaid. You will be responsible for continuing payments on any secured debts, such as mortgages and car loans, assuming that you kept the property.

Again, cost can vary from attorney-to-attorney. Since I am involved in every step for upwards of 60 months, my fee is a flat $3,500 which includes the filing fee to the court. Generally, only $500 is required to file your case. The remaining balance is be paid through the life of your chapter 13 bankruptcy plan. This makes chapter 13 an affordable option and has the added benefit of reducing what you would otherwise owe to your creditors over the life of your chapter 13 plan.

The great thing about a chapter 13 bankruptcy is that your plan isn’t carved into stone. The courts and trustees recognize that life happens. If there is an unexpected expense or a temporary change in income, we can request a modification to reflect the change in expenses or income. If you can no longer make the plan payments, we may be able to apply for a hardship discharge or otherwise convert your case to a chapter 7 bankruptcy (provided that you qualify at that point).

Yes! Even though most student loans are very difficult to discharge, there are times that it makes sense to include them in a chapter 13 bankruptcy. One example is when you simply cannot afford the payments and have other outstanding debt. Including the student loans in the chapter 13 bankruptcy could allow for the payments to be temporarily reduced. In turn, it may be possible for the lions share of each monthly payment to be applied to the student loans. Assuming that the payments are greater than the accruing interest, this may beat down the loan balance in a shorter period of time while reducing the amount paid to other unsecured creditors. Each case is fact-sensitive, so it is very important to have an attorney determine whether this would be a viable option for you.