With one of my four Indiana bankruptcy law offices located in Columbus, I’m keeping a very close eye on news about the awful flooding there. In earlier blogs I observed that, for families and individuals financially squeezed by job layoffs, divorce, or medical illness, flood damage could very well push them over the financial edge. Matters are very serious, indeed in Columbus, Indiana. However, some hopeful news has started to filter out of this hard-hit area.

Columbus Regional Hospital sustained no less than $25 million of damage, and will be closed for the next couple of months. Still, hospital officials announced, it will continue to pay its employees.

Flood victims have begun receiving money and even debit cards through the Red Cross to help them buy supplies, food, and clothing. Salvation Army and many other nonprofit organizations are helping as well. The Indiana Bureau of Motor Vehicles is working with car owners whose records were lost or destroyed, and insurance companies are under by the state to extend the grace period for payment of premiums before cancelling coverage.

FEMA (Federal Emergency Management Agency), a division of the U.S. Department of Homeland Security, offers assistance for basic needs not covered by insurance. SBA (the Small Business Administration) offers low-interest disaster loans to help homeowners, business owners, and even renters restore or replace destroyed property. Some of this aid needs to be repaid, most does not.

Even with all this help, for some individuals and families, it won’t be nearly enough. When too many negative factors pile up and impact someone’s financial situation, and then flooded property is added to the mix – sometimes the only recourse is to use the safety net of the Indiana bankruptcy system.

There is one very important and very reassuring fact about FEMA help. Money received from FEMA cannot be counted as an asset or as income in bankruptcy. That means FEMA money cannot be directed by the court to pay creditors.

So, as water levels go down, hopefully things will begin to look up in Columbus, Indiana.