Written by Attorney Tina Tran.
Updated July 27, 2020
The present-day Vigo County Courthouse was dedicated in Terre Haute, Indiana on June 7, 1888. Ten years later in 1898, the first modern bankruptcy laws, the so-called Bankruptcy Act, was enacted by the United States Congress. Most Americans would probably be surprised to learn that bankruptcy is one of Congress’ powers specifically enumerated in Article 1, Section 8 of the United States Constitution alongside such powers as the right to tax, coin money, pay debts, regulate commerce, and provide for the common defense. In other words, you have a right to file bankruptcy if you are no longer able to pay your bills. However, like any other right, understanding your Terre Haute bankruptcy rights and knowing how to exercise them requires beinginformed. This City Guide is designed to provide you with all of the information you will need to determine if filing bankruptcy in Terre Haute is right for you. Every day hundreds of people receive discharges in federal Bankruptcy Court, relieving them from years of struggle with crippling debt. And just like you, all of them started on their road to financial freedom by learning aboutChapter 7 bankruptcy and how they could complete the process successfully. And,if you are eligible,Upsolve can even guide you through the process! In fact, most individuals that we help, file bankruptcy within ten days of starting the process! The modern-day bankruptcy laws are divided into parts called “chapters.” The type of relief you are seeking will determine which chapter of bankruptcy is best for you. Chapter 7 is an excellent option for individuals who do not own a home, earn relatively low income and have $10,000 or less in assets. Chapter 13, on the other hand, is typically sought by individuals with high-value assets like a home or luxury car they wish to protect, or those who earn too much money to file a Chapter 7. Regardless of your financial situation, there is a bankruptcy solution for you. So start yours today, because as Terre Haute native and NBA Hall of Famer, Larry Bird once said: “You never make any of the shots you never take!” Similarly, you don’t get the protections of the bankruptcy laws, provided for by the Founding Fathers, without asking for the relief you need.
Terre Haute Bankruptcy Lawyers – Estimated Cost
If you do an Internet search for Terre Haute bankruptcy lawyers, you may find ads claiming you can “start” your bankruptcy with an attorney for only $100 down. You should not be misled by these types of ads. First of all, a lot of these ads are for Chapter 13 bankruptcy filings where the majority of the attorney’s fee is part of your monthly repayment plan. Further, what an attorney may charge to start your bankruptcy case may not bear any relation to what their total fee will be for representing you throughout your Chapter 7 bankruptcy in Terre Haute. On average, Terre Haute bankruptcy lawyer cost begins at $795 and goes up to $1450, or more for a Chapter 7 bankruptcy. If you would like to hire a Terre Haute bankruptcy lawyer, make sure to ask if they offer a free consultation for you to discuss the specifics of your case and the process of filing bankruptcy with their help before you commit to hiring them.
How to File Bankruptcy in Terre Haute, Indiana for Free
Being the “Crossroads of America” it is normally easy to navigate around Terre Haute. However, navigating your way around a Chapter 7 bankruptcy can be overwhelming if you don’t know where to start and what to do first. Below you will find a step by step guide to filing bankruptcy in Terre Haute. You should read the entire guide from start to finish before you begin. When you are ready for the next step, return to the beginning of the guide and complete each step as indicated, in the order listed. If you need help with a specific step in the guide, check out Upsolve’s Learning Center to see if there are additional articles on the part of the process you are working on. You can also contact the Indiana Bankruptcy Court and explain what step you need help with to find out whether they can direct you to more information. However, keep in mind that the bankruptcy clerks can’t give you legal advice, so don’t be upset if they can’t answer every question you might have.
Collect Your Terre Haute Bankruptcy Documents
The documents you will need to file your Terre Haute bankruptcy include your most recent pay stubs, your W-2, your last four months bank statements, your mortgage statement, your last two years’ tax returns, titles to all your vehicles, and deeds to any real property that you own. These documents are required and copies of them may need to be provided to your bankruptcy Trustee. The Trustee is an individual, usually an attorney, appointed by the court to oversee your Terre Haute bankruptcy. We will discuss the role of the Trustee in more detail later in this City Guide. In addition to the required documents that you will provide to your Trustee, you will need documents that show how much debt you have and what your current expenses are. These documents include credit card statements, medical bills, collection notices, utility bills, rental or lease agreements, and statements for any other outstanding loans such as payday loans. Finally, when it comes time to go to your creditors’ meeting you will also need your driver’s license and social security card.
Take Credit Counseling
One thing you will have to do before you file your Terre Haute bankruptcy is to take an approved credit counseling course. The course, also known as the Pre-Petition Bankruptcy Credit Counseling Course, is not provided by the Bankruptcy Court. Instead, you must locate a credit counseling agency in your area that has been approved to offer the course for Indiana bankruptcy cases and issue you a Certificate of Credit Counseling. The easiest way to locate an approved credit counseling agency is to simply call a credit counseling agency in your area and ask if they are approved to offer pre-bankruptcy credit counseling. Most will know what you are referring to and tell you if they are. If they don’t know what you are talking about, then they are probably not an approved provider. You can also locate an approved credit counseling agency in your area through the Office of the United States Trustee that maintains a database of approved credit counseling agencies sorted by the areas they serve. You should expect to pay between $10 and $35 for this course and it typically takes one hour to complete. Most approved credit counseling agencies will be able to let you take the course online, over the telephone or in person.
Complete the Bankruptcy Forms
Your Terre Haute bankruptcy petition will be comprised of many different bankruptcy forms. These forms are called schedules or statements and some of them are several pages long. Using the documents you have already gathered, you should be able to complete all the forms needed for your Terre Haute bankruptcy case. Some of the forms will require you to familiarize yourself with them before you begin filling them out, while others are relatively straightforward and easy. For example, Official Form 101, the Voluntary Petition for Individuals Filing for Bankruptcy, is a fill-in-the-blank form used to collect general information about you, like your name, address, and social security number. Also, there are some “check the box” type questions on the form such as what type of bankruptcy you are filing.
Get Your Filing Fee
The current fee to file a Chapter 7 bankruptcy in Terre Haute is $335. This fee can be paid in cash or by cashier’s check. You cannot use a credit card to pay this fee because you are filing bankruptcy. If you do not have the entire filing fee when filing bankruptcy in Terre Haute you can request to pay the filing fee in installments. The Court has an installment fee schedule which requires that you make an initial payment of $84 with your petition, the second payment of $84 one month after your petition is filed, the third payment of $84 two months after your petition is filed and a final payment of $83 three months after your petition is filed. These are the minimum payments allowed under the Court’s Installment Schedule but you are free to pay more if you can you will not receive your Terre Haute bankruptcy discharge until you have paid the entire filing fee. If you are unable to pay the fee at all, you can apply for a fee waiver.
Print Your Bankruptcy Forms
Print your Terre Haute bankruptcy petition and any additional bankruptcy forms you will be filing with the Bankruptcy Court such as your application to pay your filing fee in installments or your request for a fee waiver. All of your forms should be printed one side to a page and in a standard font. If you have an older home printer that prints documents in an unusual font or size you should save your Terre Haute bankruptcy documents to a DVD or USB drive and have them printed at a local copy store such as FedEx or at your local library. Only a four-minute drive from Indiana State University, the Vigo County Library on One Library Square is open Monday through Thursday from 9:00 a.m. to 9:00 p.m. and Friday from 9:00 a.m. to 6:00 p.m. The library offers on-site printing at the library and allows you to print from your home then pick everything up for ten cents per black and white page.
Go to Court to File Your Forms
The United States Bankruptcy Court for the Southern District of Indiana has a branch office in Terre Haute located on 921 Ohio Street. However, you cannot file or mail documents to this office. Instead, if you live in Terre Haute you must file your Chapter 7 bankruptcy petition at the federal courthouse in Evansville. The Court is located on 101 Northwest Martin L. King Boulevard and is open from 8:30 a.m. to 4:30 p.m.; however, bankruptcy petitions received after 4:00 p.m. will not be processed until the following day. Bring the original and one copy of your Terre Haute bankruptcy petition and supporting documents to the Court with you. You will give the documents with your original signature on them to the bankruptcy clerk to be filed. If you remember, ask the bankruptcy clerk if they can date stamp your copy while you are there, so you have a record of when you submitted the documents for you Chapter 7 bankruptcy in Terre Haute with the Court.
Mail Documents to Your Trustee
You are required to mail a copy of your supporting documents to your Court-appointed Trustee. At a minimum, this includes your paycheck pay stubs for the last 60 days and your tax return from the previous year. Contact your Trustee directly by telephone to see if they require you to send any additional documents. Make sure you keep a copy of these documents for yourself, to bring with you to your creditors’ meeting. Do not send the bankruptcy Trustee your original signed petition, as this should be filed with the Court. If the Court does not take your original petition, keeping your copy instead, bring it with you to the creditors’ meeting as the Trustee may want to verify that you have signed all the required pages on your Terre Haute bankruptcy forms. Make sure you allow ample time for your bankruptcy documents to reach the Trustee at least one week before the scheduled creditors’ meeting, which will take place approximately 30 days after you head to Court to file your Indiana bankruptcy case.
Take Bankruptcy Course 2
You have to take a second bankruptcy course between the date you file your Terre Haute bankruptcy petition and before your discharge is granted. This course is known as the Debtor Education Course or the Post-Petition Bankruptcy Course. You will not be given a discharge until you have filed your certificate of completion for this course with the Court. Unlike the first credit counseling course, this course focuses on personal financial management and is designed to give you strategies and tips to prevent you from having to file a Chapter 7 bankruptcy in Terre Haute again. This course also typically takes longer to complete than the first course and costs anywhere from $15 to $50. Unless a credit counseling agency has obtained permission in advance from the Office of the United States Trustee, you cannot be charged more than $50 for this course. As before, it is important that the course provider you choose is approved to offer the course to folks filing bankruptcy in Terre Haute.
Attend Your 341 Meeting
About thirty days after you file your bankruptcy petition, you will be required to attend what is known as a 341 meeting of creditors. Within 7 days of filing bankruptcy in Terre Haute, you will usually receive a notice from the Bankruptcy Court with the date and time of your meeting, the Trustee assigned to your case, and the location of the meeting. These meetings are scheduled during regular work hours, so make sure you arrange to take off work because having to work is not a valid reason to have the meeting postponed or rescheduled. You must bring your picture ID and your social security card to this meeting. If you do not have your social security card you should arrange to get a replacement copy from the Social Security Office before the meeting, as most Trustees will not allow you to use a paycheck stub or tax return to verify your social security number, though an original W-2 from your employer should work. If you do not receive a replacement card from the Social Security Administration before the date of your creditors’ meeting and you don’t have any recent W-2s, it is important to attend the meeting anyway and bring proof that you have ordered a replacement social security card. Most Trustees will grant you a brief postponement of the meeting until your card arrives. When the meeting does take place you will meet with the Trustee and any creditors who choose to attend and answer any questions they have about your Terre Haute bankruptcy case and your financial affairs.
Dealing with Your Car
One of the most common things someone filing Chapter 7 bankruptcy in Terre Haute wants to know is whether they can keep their car. The answer to this is almost always “Yes” but what you are required to do to keep it will depend on whether you own your car and how much it is worth. Most individuals who have a car either own it, are making payments on a car loan, or are leasing it. We will discuss each of these in order. If you own your car, you treat it like any other piece of personal property you have. You disclose it as an asset and claim the appropriate exemption you are entitled to. If your car is worth more than the available exemption, your Trustee may sell the car for the benefit of your creditors, though even then you will get your exemption by receiving a portion of the sales proceeds equal to the exemption you claimed. If you are making payments on your car, you may elect to either reaffirm the loan, redeem the car, or surrender it. Reaffirming the loan means you agree to keep paying the loan in exchange for the lender allowing you to keep the car. Redeeming the car means you offer to pay the current market value of the car in one lump sum to the lender with any excess owed on the car being discharged in your bankruptcy as an unsecured debt. If you surrender the car, you give it back to the lender and tell them when and where they can pick it up. The balance of the loan is discharged as part of your Terre Haute bankruptcy.
Indiana Bankruptcy Means Test, Bankruptcy Forms, and Exemptions for Terre Haute
Indiana Means Test
Part of filing your own Chapter 7 bankruptcy in Terre Haute includes passing the Means Test. The Indiana bankruptcy Means Test is designed to compare your total household income to the median income of similarly sized families in your county and state. If your household income is the same or lower than theirs, then you pass the Indiana bankruptcy Means Test. If your household income is higher than theirs, then you will be told there is a presumption of abuse in your case. A presumption of abuse at this stage simply means that it looks as though you earn enough income and you should be able to pay your bills. If so, complete the second part of the Chapter 7 Means Test known as the Chapter 7 Means Test Calculation. This will allow you to deduct certain expenses from your income to see if you can overcome the presumption of abuse after considering your expenses. Since the Indiana bankruptcy Means Test only considers your household income from the six months before your bankruptcy case is filed, you can improve your chances of passing the Means Test by paying attention to the timing. For example, if you have a three-person household and five months ago both you and your spouse were earning over $5,000 per month but now only one of you is employed. If it looks like you make too much money to qualify, it might be best to wait another month to file your Terre Haute bankruptcy petition. That way, the last six months will only reflect the one income and paint a much more accurate picture of your financial situation at the time you are filing.
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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Indiana Bankruptcy Forms
You don’t need to go to the Bankruptcy Court to pick up the bankruptcy forms you will need to prepare for your Terre Haute bankruptcy case. All of the required Indiana bankruptcy forms can be downloaded for free in fillable PDF format. A PDF is a type of computer file that allows you to fill in the bankruptcy forms on your computer and save the information to be printed later. Some Courts like the Southern District of Indiana also provide additional forms and handouts to individuals filing their own bankruptcy petitions through their Court website.
Now that you have an overview of how to file bankruptcy in Terre Haute, there are a few things about the bankruptcy process itself you may want to know. One of these things are the so-called exemptions. Exemptions are allowances granted by either state or federal law that enable you to keep a certain amount of your real and personal property when you file for Chapter 7 bankruptcy. To benefit from an exemption, however, you must claim the exemption on Schedule C, Part 2 of your Terre Haute bankruptcy petition. You claim an exemption by listing the property, or type of property, you are claiming to be exempt and the amount of the exemption for that type of property you are using. For example, Indiana bankruptcy exemptions allow you to exempt up to $8,000 of personal property. Meaning, If you have a gold necklace that is worth $800 and you want to exempt it, you would list the necklace in Part 2 of Schedule C and then exempt $800 of its value. This would then leave you $7,200 to protect, or exempt, other personal property that you own. Unlike some states, Indiana does not allow you to choose between Indiana bankruptcy exemptions and federal exemptions. You must use the Indiana bankruptcy exemptions.