Written by Attorney Tina Tran.
Updated July 28, 2020
Filing bankruptcy is a serious step. For many consumers, the thought of filing a Muncie bankruptcy fills them with a sense of dread and shame. However, bankruptcy should not be viewed as a stigma placed upon people who have fallen into financial troubles. Bankruptcy is a legally established method of allowing people who can no longer afford to pay their bills to come out from underneath their burgeoning debt and make a new beginning. Many famous television stars, singers, and large corporations have filed for bankruptcy and come out of it stronger than ever. There are actually three different types of consumer bankruptcies known as “chapters.” The chapters refer to the chapter in the United States Bankruptcy Code where that type of bankruptcy is laid out. Chapter 7 is the most common type of consumer bankruptcy and is known as a “liquidation” because all your debts are eliminated and you do not have to pay any portion of them. Chapter 13 is the second most common type of bankruptcy and it is sometimes referred to as a “Chapter 13 repayment plan” because all your debts are included in a “plan” that lays out how much of each debt will be repaid, how much you will pay on each debt, and how long you will be given to repay them. The final consumer bankruptcy is Chapter 11. You may have heard of a Chapter 11 bankruptcy recently when the longtime Indiana brewery Scotty’s Brewhouse filed for Chapter 11 bankruptcy protection. A Chapter 11 bankruptcy is typically only filed by businesses or consumers who have significant businesses that they wish to include in their Muncie bankruptcy. This guide is primarily intended for those looking to file a Chapter 7 bankruptcy and want to know if they can file it on their own. And the answer to that question is more than likely absolutely!
Muncie Bankruptcy Lawyers – Estimated Cost
According to Ball State University, the average yearly cost to attend Ball State University after financial aid is $16,000. In Muncie, the average cost of a bankruptcy lawyer is between $795 and $1450, meaning hiring an attorney to do a Chapter 7 bankruptcy for you could cover almost one eighth of the costs of sending your son or daughter to a public university for a year. It is no wonder many consumers with relatively straightforward bankruptcy cases have decided to file their own Chapter 7 bankruptcy using the information provided by Upsolve in this City Guide.
How to File Bankruptcy in Muncie, Indiana for Free
If you are thinking about filing your own Chapter 7 bankruptcy, we’ve written this City Guide and organized it in a way to allow you to use it as a step-by-step guide to starting and completing your own Muncie bankruptcy. This guide covers collecting your starting documents, taking your required credit counseling courses, filling out your bankruptcy forms, paying your filing fee, taking your forms to your local court clerk, attending your meeting of creditors, and dealing with your car in bankruptcy.
Collect Your Muncie Bankruptcy Documents
The first step to filing bankruptcy in Muncie is to collect all of your necessary Indiana bankruptcy documents. So what are bankruptcy documents? Bankruptcy documents are those personal financial records of yours that will allow you to give an accurate picture of your current financial situation to the Bankruptcy Court. These records include such things as your pay stubs, your tax returns, bank statements, 401k statements, life insurance policies, vehicle titles and the deed to your home. These documents will typically give an accurate picture of your income and assets. You will also need to gather documents that show what your current expenses are and how much debt you have. These documents typically include such records as credit card statements, medical bills, utility bills, phone bills, car payments, car insurance, court judgments, and collections. Finally, you will also need to document your name, age, and date of birth. You will need your driver’s license or state identification card and your social security card to do this.
Take Credit Counseling
A prerequisite to filing any Muncie bankruptcy is to complete a pre-bankruptcy credit counseling course and obtain a Certificate of Credit Counseling. You will be required to file the certificate with your Indiana bankruptcy petition when you file it at the bankruptcy court. The largest provider of bankruptcy approved credit counseling in Muncie is Credit Counseling Centers of the Midwest. They have a local brick and mortar office on 2803 N. Oakwood Avenue, only a sixteen minute walk from Scheumann Stadium. They also offer pre-bankruptcy credit counseling online under the name of Apprisen. You may also be able to find other court approved bankruptcy counseling agencies by requesting a list from the federal courthouse in Indianapolis.
Complete the Bankruptcy Forms
After you have gathered all your necessary Muncie bankruptcy documents and obtained your certificate for completing your pre-bankruptcy credit counseling, you are ready to start filling out your Indiana bankruptcy forms. You should begin this process by making sure you have downloaded all of the forms you will need to complete your petition. You may also want to download the pro se debtor package from the website of the United States Bankruptcy Court for the Southern District of Indiana. “Pro se” is simply a Latin word meaning “in one’s own behalf” and is used by the Court to refer to consumers representing themselves in their own Indiana bankruptcy cases. The pro se debtor’s package includes some optional local forms you may need like the Electronic Noticing Request and a checklist of Required Lists, Schedules, Statements, and Fees. Once you have downloaded all of the forms you will need for your Muncie bankruptcy petition, use the financial documents you gathered previously to fill out each form with the requested information. A common mistake made by consumers who file their own Muncie bankruptcy is not answering every question on the Indiana bankruptcy forms or not including every form in their petition. Do not do this. Be sure to answer every question even if you have to check the “not applicable” or “none” box. And be sure to include every form in your completed petition even if it is blank.
Get Your Filing Fee
The filing fee for a Chapter 7 bankruptcy in Muncie is $335. If you cannot come up with the entire filing fee when you are ready to file your Chapter 7 bankruptcy petition, you have a few options. The first option is to simply start putting money aside now before you begin preparing your Muncie bankruptcy petition. Just putting aside $50 per week will give you two thirds of the filing fee in about one month. If your finances are so tight that even saving $50 a week is not possible then you can request to pay your filing fee in installments. If approved an installment plan will allow you to make an initial down payment when your petition is filed and then pay the remaining balance over the next ninety days. Instead of $50 per week this type of plan could allow you to put aside as little as $25 per week to make a monthly installment payment of $100. On the other hand, if you are indigent, receiving public assistance, retired and on a fixed income or unemployed and not receiving any unemployment compensation then you can request to have the fee waived. However, fee waivers are somewhat rare in bankruptcy Court and if your waiver request is denied and you have already filed your petition it will be dismissed if you do not pay the entire filing fee within seven (7) days. Whenever possible it is best to pay the entire filing fee when you file your Muncie bankruptcy petition.
Print Your Bankruptcy Forms
When you are ready to print your Indiana bankruptcy forms, you should expect to print anywhere from sixty to one hundred pages. You must print the entire petition one side to a page so duplex printing is not acceptable. If your home printer cannot handle this large a print job your most affordable option is your local library. The Carnegie Library in downtown Muncie offers black and white printing for fifteen cents per page. Make sure you also print any requests for installment payments or for a fee waiver. Finally, while you are at the library you may as well make three complete copies of your bankruptcy petition along with your supporting documents. You will need one copy for yourself, a copy for the Court Clerk and a copy for your bankruptcy Trustee.
Go to Court to File Your Forms
The next step in filing your own Muncie bankruptcy is to take your bankruptcy petition and all your supporting documents to the Bankruptcy Court to be filed. Unfortunately, unless you work in Indianapolis you will have to turn this step into a day trip and plan a trip to the United States Bankruptcy Court for the Southern District of Indiana in Indianapolis, which serves the City of Muncie. The bankruptcy Court is located downtown in the Birch Bayh Federal Building, 46 East Ohio St., Indianapolis, Indiana. The Court is open from 8:30 a.m. to 4:30 p.m., but bankruptcy petitions submitted after 4:00 p.m. will not be processed until the next day. You should plan on being at the courthouse for at least one hour, as you may be required to upload your petition electronically using one of the Court’s secured terminals. You should also plan on paying anywhere from $15 to $20 for parking. Finally, do not forget to bring your $335 filing fee and your request to pay the fee in installments or for a fee waiver if you are requesting either of these.
Mail Documents to Your Trustee
When you get back from filing your Muncie bankruptcy petition in Indianapolis, you should immediately mail a copy of your petition and supporting documents to your Court appointed Trustee. The Trustee is an attorney appointed by the Bankruptcy Court to review your bankruptcy petition and handle your Indiana bankruptcy case. The name and address of your Trustee will be included on Form 309a. Form 309a is also known as a Notice of Chapter 7 Bankruptcy Case. This notice will also provide you with the date of your upcoming creditors meeting. Before mailing your Muncie bankruptcy petition and supporting documents to your Trustee make sure you have made a copy for yourself. Finally, while you are not required to send it certified mail return receipt requested it is probably a good idea to do so in case the Trustee’s office contacts you and informs you they have not received it. This is also why you should keep a copy for yourself of everything you send to the Trustee, in case you need to send any of it again.
Take Bankruptcy Course 2
The Post-Petition Bankruptcy Course is the second of the two mandatory credit counseling courses that every person filing bankruptcy in Muncie must take. This course is usually considerably longer than the first course and focuses on giving you suggestions and advice on how to budget and handle your money in the future once you have obtained your Chapter 7 discharge. Depending on the credit counseling agency you use, you can take the course online, over the telephone, or in person. However, not every credit counseling agency will offer all three so make sure you ask beforehand if you prefer to take it one way over another. Also, the cost of the course may vary depending on which way you choose to take it. With most credit counseling agencies charging more if you prefer to take it in person or over the telephone. The cost of this course ranges from $25 for the online versions to as high as $50 if you are taking it in person.
Attend Your 341 Meeting
One of the last things you will be required to do to complete your Muncie bankruptcy is attending what is known as your 341 meeting of creditors. The 341 meeting of creditors is an informal meeting between you, your Trustee and your creditors. Typically the date for this meeting is within thirty days of the date your petition was filed. You must bring your Muncie bankruptcy petition, your supporting documents, your driver’s license or state identification card, and your social security card to this meeting. Your Court appointed Trustee will preside over the meeting and after swearing you in will review your identification and ask you some preliminary questions relating to the information in your bankruptcy petition. The Trustee will then give your creditors a chance to ask you any questions they may have relating to your bankruptcy petition as well as your financial affairs. Some sample questions you may be asked by the Trustee could include “What led to you having to file bankruptcy?” or “Are you suing anyone or expecting to sue anyone in the near future?” An example of a question you might be asked by a creditor could be “When did you last use your credit card?” or “Do you have insurance on your car?” The most important thing to remember is not to take any of the questions personally. The Trustee is required to ask the questions he is asking in order to file a report on your case with the Court. Your creditors are also simply doing their job and making sure the debts owed to them are eligible to be discharged in your Muncie bankruptcy.
Dealing with Your Car
Just like all your other property your car or personal automobile is protected when you file a Muncie bankruptcy. This means whether you continue to make your car payments or not, your lender is not allowed to contact you about the missed payments, threaten to take your car, or attempt to repossess your car while your Indiana bankruptcy is pending, unless they first obtain permission from the Court. On the other hand, if you still owe money on your car you must state in your Chapter 7 bankruptcy petition whether you intend to reaffirm the debt on the car, redeem the car, or surrender the car to the lender. Reaffirming the debt is done by entering into what is known as a reaffirmation agreement with your lender. This agreement reaffirms the debt you owe on the car and obligates you to keep paying on that debt even after you obtain your discharge. Redeeming the car means offering to pay the lender the current value of the car in exchange for obtaining a clear title to the car. Surrendering the car means that you surrender the car to the lender at a place and time agreed to by both you and the lender.
Indiana Bankruptcy Means Test, Bankruptcy Forms, and Exemptions for Muncie
Indiana Means Test
If you believe filing your own Chapter 7 bankruptcy is something you would like to try you should take the Upsolve Indiana Means Test. The Means Test is a series of calculations based on your family income, family size, and state of residence that will tell you whether or not you can file for Chapter 7 bankruptcy. This determination is known as the presumption of abuse. If you fail the Indiana bankruptcy Means Test, it will let you know that a presumption of abuse exists in your Indiana bankruptcy case. A presumption of abuse means that your household income is high enough that you should be able to pay your bills. If you pass the Means Test it will indicate that no presumption of abuse exists in your case and your household income is well within the limits allowed for filing a Chapter 7 bankruptcy.
Median Income Levels for Indiana
Indiana Median Income Standards for Means Test for Cases Filed On or After May 1, 2020
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Poverty Levels for Indiana
Indiana Fee Waiver Eligibility for Cases Filed On or After May 1, 2020
Eligible for fee waiver when under 150% the poverty level.
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When you get your Indiana bankruptcy forms, take a moment to familiarize yourself with each form. This can be as simple as reading the questions asked on each form and putting a sticky note on the form with the documents you will need to answer those questions. For example Schedule G – Executory Contracts and Unexpired Leases asks you to list any executory contracts or leases you have. An executory contract is a contract that is to be fulfilled in the future or that you are currently fulfilling such as a gym membership. And a lease is an executory contract pertaining to real property. If you are leasing your home or car you have to list the information requested pertaining to that lease on Schedule G. So when you review your Indiana bankruptcy forms simply, place a sticky note on Schedule G reminding you to have a copy of your apartment lease or car lease with you when you get ready to fill it out.
In the overwhelming majority of Chapter 7 bankruptcies, consumers are allowed to keep all of their possessions. This is because of something known as “exemptions”. Exemptions are protections provided by bankruptcy law for your real and personal property. As long as your property does not exceed the established monetary values set by bankruptcy law that property cannot be taken by the Trustee to pay your creditors. For example, under federal exemptions, you can protect up to $2,525 in tools of your trade. This means if you are a plumber up to $2,525 of the plumbing tools you use to do your job are protected from being seized by the Trustee. On the other hand, if you own an expensive sump pump worth $4,000 for example then you would have to use another exemption to protect that piece of equipment or the Trustee could arrange to sell it to pay your creditors. Fortunately, everyone who files a Muncie bankruptcy can choose between two sets of exemptions. Federal exemptions are available to all filers and Indiana bankruptcy exemptions are available to those filers who reside in the State of Indiana. You can choose to use whichever set of exemptions is most favorable to you and your situation.