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Bankruptcy in Indiana, Part 2

Bankruptcy is in the U.S. Constitution


In Part 1, we looked at some recent news showing bankruptcy filings in Indiana are down somewhat from this time a year ago, based on numbers for the fiscal year that ended Sept. 30.

You can safely disregard those numbers if you truly need bankruptcy protection

Although the numbers seem encouraging, those who still need bankruptcy protection are still hurting in this Wall-Street ravaged economy. Fortunately, bankruptcy protection is deeply embedded in the forgiving, ever-hopeful fabric of the United States of America.

In the USA, we long ago recognized the folly of sending people to debtor’s prison, where they could no longer service any debt at all and were removed both from the economy and the tax base.

Bankruptcy & The Constitution

In fact, bankruptcy is in Section 8 of the Constitution, listed among the several powers that Congress shall have (namely): “To establish a uniform rule of naturalization, and uniform laws on the subject of bankruptcies throughout the United States. . .”

The powerful protection of the Bankruptcy Code

In other words, we, the people, have not yet been recognized as being “too big to fail”–but every individual (and business) is recognized as “too important to jail.” That recognition has led to the codification of the federal bankruptcy laws contained in Title 11 of the United States Code. Known collectively as the Bankruptcy Code (or, simply, “the code”), together these statutes provide a powerful tool against harassment by creditors and illegal collection practices. Immediately upon filing, for example, creditors are ruled by an “automatic stay” from the U.S. Bankruptcy Court. This stay prevents them from contacting you anymore (i.e., ends creditor harassment) and says they must now work through the federally mandated procedures within the Bankruptcy Code.

Once the petition is filed, most creditors are forced to shut up, stand down

That, alone, is often cited by debtors as a great relief as they get on about their lives and the business of starting over. Despite many myths about bankruptcy--often perpetuated by the same credit-card industry that pushed so hard for the so-called Bankruptcy Reform Act of 2005 that made it tougher to file for bankruptcy protection--those who fulfill the court's obligations and obtain their bankruptcy discharge often find their finances and credit in much better shape than they were before filing.

The bankruptcy courts in your state

Indiana has two, federal bankruptcy courts, serving the indicated divisions:

Advice from the Northern District (applies to all bankruptcies)

The following is from the Northern District's page, "Filing Without an Attorney--Pro Se":
CAUTION: It is very important that a bankruptcy case be filed and handled correctly. The rules are very technical and a misstep may affect your rights. Further, bankruptcy has long-term financial and legal consequences - hiring a competent attorney is strongly recommended. Even if you cannot afford to pay an attorney, you may be able to qualify for free legal services. For information about hiring an attorney, or about free legal services, contact your state or local bar association.

SPECIAL CAUTION REGARDING BANKRUPTCY PETITION PREPARERS: Beware of bankruptcy petition preparers who do not comply with all legal requirements. The role of non-attorney petition preparers is solely to type information on bankruptcy forms. They are barred by law from providing legal advice -- they cannot explain how to answer legal questions or assist in bankruptcy court. Petition preparers must sign all documents they prepare; print their name, address, and social security number on such documents; and furnish copies to you. They cannot sign a document on your behalf or receive payment from you for court fees.

Consider free case evaluation

We can help: If you’re interested in learning more about the power of bankruptcy protection, please, browse our site for more information; if you need help filing for bankruptcy protection for yourself, consider signing up for a free case evaluation.


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