Indianapolis Indiana Bankruptcy Law Blog

It’s a financial nightmare no one wants to live through: the prospect of losing your home. But it can happen to the best of us – and often for reasons beyond our control. Perhaps you lost your job or received a devastating medical diagnosis. Maybe your credit card debt spiraled out of control. Before you know it, you’re no longer able to make your mortgage payments. Your home – the very center of your life and family – is in jeopardy.

Scary as your situation may seem, you should never assume there’s no way out. Chapter 13 bankruptcy may be a way to keep your home and get your finances back on track.

Indianapolis residents who have unsecured debts that they cannot pay often look to Chapter 7 bankruptcy as a way to gain a financial fresh start. Although it may seem as if virtually anyone can file for a Chapter 7 bankruptcy, that's not the case. There are some factors that may make you ineligible to file.

Anyone who has had their bankruptcy case voluntarily dismissed because their secured creditors requested a leave of the court may be ineligible to file once again, especially if it occurred during the past 180 days. Creditors often do this in an attempt to recover collateral.

It might seem reasonable to assume that people in their 50s and early 60s have the largest amount of medical debt. They're at the age where their bodies are starting to give out, but they aren't yet old enough to qualify for Medicare.

However, according to one study on medical debt that used data from 2016, people of one particular age -- 27 -- were more likely to have at least one medical bill sent to a collection agency than anyone else. Some 11% of those with medical debt, by that definition, were that age.

Student loan debt has been notoriously difficult to discharge in bankruptcy. They typically have to show that repaying it would cause them "undue hardship." However, a report just released by the American Bankruptcy Institute's (ABI) Commission on Consumer Bankruptcy includes recommendations that would change that.

The report addresses a number of subjects and recommendations for changes to the bankruptcy code, which hasn't seen any major updates since 2005. In the ensuing 14 years, U.S. student loan debt has grown to a whopping $1.5 trillion.