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Bankruptcy filings up in Indiana

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Bankruptcy cases in federal courts have increased more than 30 percent in the fiscal year ending in September as compared to the 2007 fiscal year. In Indiana, bankruptcy cases have increased more than 25 percent in the U.S. District Court's Northern and Southern districts.

For the federal judiciary's fiscal year ending Sept. 30, the Northern and Southern Districts had 37,538 bankruptcy filings, according to statistics from U.S. Courts. Filings increased 25 percent in the Northern District and 27.5 percent in the Southern District. In the 2007 fiscal year, bankruptcies filed in Indiana totaled 29,656.

Nationally, 1,042,993 bankruptcy cases were filed in federal courts this fiscal year, as compared to the 801,269 filed in 2007.

Matthew Schiller, partner of Schiller Law Offices in Indianapolis, isn't surprised by the increase in bankruptcies here. He's seen an increase as a result of foreclosures and credit card use.

Many adjustable rate mortgages entered into two or three years ago are resetting now and increasing to the point people can't make their payments, he said. And, because of the credit crisis, people can't refinance their mortgages, get credit, or transfer credit card balances.

"We started to see an increase six to eight months ago," he said. "A lot of it is tied to credit problems."

Besides housing and credit card issues, people have filed bankruptcy as a result of unemployment, Schiller said.

While Indiana's filings have increased, the state didn't experience the extreme uptick in filings states such as Arizona, California, Florida, and Nevada have seen. Bankruptcy filings in the Central District of California went up more than 96 percent over last year; Arizona's filings increased by 73.4 percent.

As for the states bordering Indiana, Illinois and Kentucky had comparable increases to Indiana at 25.1 percent in Illinois, and 26.6 percent in Kentucky. Ohio courts saw an average increase of around 13 percent and Michigan was near 22 percent.

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  1. Mr. Levin says that the BMV engaged in misconduct--that the BMV (or, rather, someone in the BMV) knew Indiana motorists were being overcharged fees but did nothing to correct the situation. Such misconduct, whether engaged in by one individual or by a group, is called theft (defined as knowingly or intentionally exerting unauthorized control over the property of another person with the intent to deprive the other person of the property's value or use). Theft is a crime in Indiana (as it still is in most of the civilized world). One wonders, then, why there have been no criminal prosecutions of BMV officials for this theft? Government misconduct doesn't occur in a vacuum. An individual who works for or oversees a government agency is responsible for the misconduct. In this instance, somebody (or somebodies) with the BMV, at some time, knew Indiana motorists were being overcharged. What's more, this person (or these people), even after having the error of their ways pointed out to them, did nothing to fix the problem. Instead, the overcharges continued. Thus, the taxpayers of Indiana are also on the hook for the millions of dollars in attorneys fees (for both sides; the BMV didn't see fit to avail itself of the services of a lawyer employed by the state government) that had to be spent in order to finally convince the BMV that stealing money from Indiana motorists was a bad thing. Given that the BMV official(s) responsible for this crime continued their misconduct, covered it up, and never did anything until the agency reached an agreeable settlement, it seems the statute of limitations for prosecuting these folks has not yet run. I hope our Attorney General is paying attention to this fiasco and is seriously considering prosecution. Indiana, the state that works . . . for thieves.

  2. I'm glad that attorney Carl Hayes, who represented the BMV in this case, is able to say that his client "is pleased to have resolved the issue". Everyone makes mistakes, even bureaucratic behemoths like Indiana's BMV. So to some extent we need to be forgiving of such mistakes. But when those mistakes are going to cost Indiana taxpayers millions of dollars to rectify (because neither plaintiff's counsel nor Mr. Hayes gave freely of their services, and the BMV, being a state-funded agency, relies on taxpayer dollars to pay these attorneys their fees), the agency doesn't have a right to feel "pleased to have resolved the issue". One is left wondering why the BMV feels so pleased with this resolution? The magnitude of the agency's overcharges might suggest to some that, perhaps, these errors were more than mere oversight. Could this be why the agency is so "pleased" with this resolution? Will Indiana motorists ever be assured that the culture of incompetence (if not worse) that the BMV seems to have fostered is no longer the status quo? Or will even more "overcharges" and lawsuits result? It's fairly obvious who is really "pleased to have resolved the issue", and it's not Indiana's taxpayers who are on the hook for the legal fees generated in these cases.

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