Indiana does not have a specific motor vehicle exemption, but you can use Indiana's wildcard exemption to protect equity in your car, truck, van, or other vehicle if you file for Chapter 7 bankruptcy. Here you’ll find information about the Indiana's wildcard exemption: how much it is, what types of vehicles it covers, how it works for married couples, how to find the applicable statute, and more.
(For more information about exemptions, including how they work and which ones you can use, see our Bankruptcy Exemptions area. For information specific to the motor vehicle exemption, see our Motor Vehicle Exemption in Bankruptcy area.)
Indiana's Exemptions and Your Car
Indiana’s exemptions play a large role in determining whether or not the bankruptcy trustee can take your vehicle to repay your unsecured creditors. If the equity in your car is less than Indiana’s wildcard exemption, then the trustee cannot sell it. If the equity in your car is significantly more than the applicable exemption amounts, the trustee is likely to sell your car to repay your unsecured creditors. For details, see The Motor Vehicle Exemption: Can You Keep Your Car in Chapter 7 Bankruptcy?
Keep in mind that even if your car is safe from the bankruptcy trustee, the lender may be able to repossess your car during or after bankruptcy. To learn more, see Your Car in Chapter 7 Bankruptcy and If You Are Behind on Your Car Payments, Can Chapter 7 Help?
Using Indiana's Exemptions to Protect Your Motor Vehicle
Indiana does not have a motor vehicle exemption. However, you can use the wildcard exemption to protect your car or other vehicle. Indiana law allows you to exempt up to $9,350 of any property, which includes motor vehicles. Whatever you do not use to protect other property, you can use to protect your car.
The Federal Motor Vehicle Exemption
Some states allow bankruptcy filers to use the federal bankruptcy exemptions instead of state exemptions, but Indiana is not one of these states.
Can Married Couples Double Indiana’s Motor Vehicle Exemption?
Some states allow married couples filing a joint bankruptcy petition to double the listed exemption amounts. Indiana does allow this, providing married couples with $18,700 to protect their property.
(To learn about the advantages and disadvantages of joint bankruptcy filings, see Nolo's section on Bankruptcy Options for Married Couples).
What Vehicles and Insurance Are Covered by the Motor Vehicle Exemption?
The wildcard exemption covers any personal property, which includes any vehicles, insurance proceeds or any other property or cash associated with the vehicle.
Checking Indiana’s Exemption Laws
You can find Indiana’s motor vehicle exemption at Ind. Code Ann. 34-55-10-2.
When the Indiana Exemption Amounts Are Updated
The exemption laws in Indiana change every six years, starting in 2010. For updated statute information, visit the Indiana General Assembly website, or look here for more information: www.in.gov/dfi/Title_750_10.pdf.