Credit Counseling

• Any Indiana debtor who wishes to file for personal bankruptcy must attend a mandatory credit counseling session. During credit counseling, the debtor has the opportunity to explore his options. He can find alternatives to filing bankruptcy, and if he decides that he wants to go ahead with the bankruptcy filing, he can figure out which chapter of bankruptcy best fits his situation. The debtor needs to have less than $360,475 of unsecured debt and less than $1,081,400 of secured debt to file for Chapter 13 bankruptcy.
  
  

Proposing Plan

• When he decides on Chapter 13 bankruptcy, he will put a budget together, and he will present this budget to the bankruptcy court. The budget can serve as a proposal for a debt repayment plan. The debtor needs to first figure out the length of his debt repayment plan. He can do so by taking the means test. He takes the means test by comparing his family income to the median family incomes in Indiana.
  
  

Median Incomes

• As of 2010, Indiana's median family incomes were listed as $40,683 for a single earner, $52,367 for a family of two, $59,438 for a family of three and $70,621 for a family of four. The debtor should add $7,500 for each family member in excess of four. If the debtor's family income is less than the state median, his debt repayment plan will last for three years. If the debtor's family income is more than the state median, his debt repayment plan will last for five years.
  
  

Chapter 13 Plan

• Chapter 13 bankruptcy offers an Indiana debtor relief in that if the debtor is behind on bills, has threats of repossession or even foreclosure, creditors must stop all collection actions. Creditors are stayed for the duration of the Chapter 13 debt repayment plan. The bankruptcy trustee acts as an intermediary between the debtor and his creditors. The debtor must make monthly debt repayment plan payments to the trustee, and the trustee distributes payment to each of the debtor's creditors until the debtor completes the plan. In most cases, the debtor sets up a payroll deduction for the payment to be sent directly to the trustee each month. Through the plan, the debtor can make up payments on his house, car and other items. At the end of the plan, the debtor will be current on his bill payments and will be allowed to keep all of his property.