Bankruptcy Exemptions in Indiana

Chapter 7 bankruptcy, or liquidation, allows for certain debt to be erased.  The Chapter 7 bankruptcy laws determine who may qualify, eligible debt and the filing process.  State laws vary as far as eligibility and filing guidelines.  Individuals that reside in the United States, own property, or have a place of business can file for bankruptcy in a federal court through Chapter 7.  This process may not be used by those who have had bankruptcy cases dismissed within the past 6 months.

Real estate mortgages and secured loans are generally exempt.  State laws determine the value of property that can be claimed exempt.  Other assets of value are then sold in order to repay outstanding balances with creditors.  The types of unsecured debt that may be legally discharged does not generally include child support, spousal support, income taxes, property taxes, student loans and fines and restitution imposed by a court.

Indiana has state exemptions available to those filing Chapter 7 bankruptcy.  Federal exemptions such as retirement, survivor and death and disability benefits are available in some states, however federal bankruptcy exemptions are not available in Indiana.

Keep Your Car

• You can choose to reaffirm your auto debt if you still owe money to the lender.  You must do this within a specified period of time.
• Indiana offers a tangible personal property exemption up to $8000, which could include an automobile

If you default on the loan and the car is repossessed, you will be held liable for the repossession expenses

Keep Your Home

In an effort to prevent a home from going into foreclosure, it may be included as a bankruptcy exemption.  The home exemption relates to the amount of equity in the home and whether or not it falls within the exemption amount.

• Indiana exemption is $15,000
• If you have the ability to pay the difference between the equity and the total exemption amount from sources other than the bankruptcy estate, there may be a chance you can keep your home
• Tenancies by the entirety may be exempt from debts incurred by only one spouse

Filing Schedule C of a Bankruptcy Petition

When filing chapter 7 bankruptcy, a list of the property, which you are claiming to be exempt, is required.  This is referred to as a Schedule C.  Included with the property must be the laws and value pertaining to the property listed to be exempt as well as the value of the property without deducting exemption. 

Hire a Lawyer to Represent Your Case

When considering bankruptcy, it is important to meet with a bankruptcy attorney.  An Indiana bankruptcy attorney will help you determine if bankruptcy is advisable for your situation, as well as the type of bankruptcy best suited to your goals.  This will include the state laws regarding to exemptions and the process of filing bankruptcy with the courts.