Common Indiana Bankruptcy Exemptions

The idea of filing for bankruptcy can be intimidating, particularly if you aren’t sure what will happen to your property. Indiana provides some exemptions that you can use to keep certain assets when filing for bankruptcy. You may be able to protect some property, such as your car, house or retirement account.

First, you should have a solid understanding of the common bankruptcy exemptions in Indiana. Discuss your case with our team at Whitten & Whitten to see whether bankruptcy is right for you. We can provide information specific to your situation and guide you through the next steps. 

How Bankruptcy Exemptions Work in Indiana

Whether you file for Chapter 7 or 13 bankruptcy, you may be able to protect property that falls under an exemption, although each chapter handles nonexempt property differently. For instance, a trustee sells and distributes the nonexempt property’s proceeds to creditors in a Chapter 7 bankruptcy. In a Chapter 13 bankruptcy, you can keep what you own while paying the nonexempt property’s value through a repayment plan or disposable income.   

When Do Indiana’s Bankruptcy Exemptions Apply?

You are eligible for bankruptcy only after you’ve lived in Indiana for over 180 days. However, in order to utilize Indiana’s exemptions, you’ll need to have lived in the state for a minimum of 730 days before filing. If you do not meet this requirement, you will use the exemptions of the state you previously lived in. 

Common Bankruptcy Exemptions in Indiana

Even though people living in Indiana are not eligible for federal bankruptcy exemptions, there are other options available:

• Indiana Homestead Exemption. Protect a maximum of $19,300 in equity in tangible personal property or real estate, such as a mobile home, that is your primary personal residency. A homestead may include a house, condominium, farm or trailer. A couple that jointly files bankruptcy and co-owns a home can double the exemption amount. Additionally, the debtor’s interest held as a tenant may be exempt if only one of the spouses files; this can be a difficult process, however, so consult an attorney first. 

• Wildcard Exemption. You are allowed to protect any tangible property or nonresidential real estate that is worth a maximum value of $10,250, as well as up to $400 of intangible property.

• Motor Vehicle Exemption. Even though Indiana doesn’t have a specific exemption for motor vehicles, you may be able to use the wildcard exemption to protect the equity in your vehicle. 

Certain other exemptions include, such as pensions and retirement benefits. These may include IRA accounts, police and firefighter pension funds, legislature benefit plans and teacher’s retirement fund benefits. Additionally, certain personal property may be exempt, such as health aids, military equipment and uniforms, health savings accounts and certain insurance benefits. To confirm whether your specific tangible or intangible property is considered exempt, talk with our attorneys. 

Visit a Bankruptcy Attorney Now

Before filing for bankruptcy in Indiana, review your assets to see if any may be exempt under state statutes. Our Merrillville bankruptcy lawyers at Whitten & Whitten are available to review your case. Contact us today.