Filing for Chapter 13 bankruptcy in Indiana can be a wise choice for those looking to protect their assets while managing overwhelming debt. Unlike Chapter 7 bankruptcy, which may require you to liquidate assets, Chapter 13 allows you to keep your property. This process involves creating a repayment plan to pay off your debts over a period of three to five years. Before you get started, it’s important to understand how you can protect your assets during this process.
Creating a repayment plan
It’s crucial to understand the basics of Chapter 13 bankruptcy. When you file, you propose a repayment plan to the court, showing how you will pay off your creditors over time. This plan is based on your income, expenses, and the type of debts you have. The goal is to pay off as much debt as possible while allowing you to keep your home, car, and other essential assets.
Indiana’s exemptions for asset protection
In Indiana, specific exemptions help protect certain assets. For instance, Indiana’s homestead exemption allows you to protect up to 60% of your property’s assessed value in a residential home. If you jointly own the home with a spouse, this amount doubles. This exemption can prevent foreclosure and allow you to maintain ownership of your home as long as you adhere to the repayment plan.
The automatic stay
Another critical aspect of Chapter 13 is the automatic stay. Once you file for bankruptcy, the court issues an automatic stay, which stops creditors from pursuing collection actions against you. This means they cannot garnish your wages, foreclose on your home, or repossess your car during the bankruptcy process. This provides immediate relief and stability as you work on your repayment plan.
Starting your process
Chapter 13 bankruptcy offers a structured way to manage debt while protecting your assets. Consulting with a knowledgeable bankruptcy attorney can help you navigate this process and create a plan that works for you, ensuring you emerge from bankruptcy with your assets intact and your financial situation improved.
