If you file for Chapter 7 bankruptcy in Indiana, you can protect some or all of your property with Indiana’s bankruptcy exemptions. The bankruptcy exemptions in Indiana also play a role in Chapter 13 bankruptcy. Read on to learn about what property is covered by Indiana’s bankruptcy exemptions.
For a general overview of bankruptcy exemptions, how they work, and which ones you can use, visit the Bankruptcy Exemption topic page.
Indiana Requires Debtors to Use State Exemptions
Indiana has enacted legislation “opting out” of the federal bankruptcy exemptions. This means that bankruptcy filers in Indiana are only permitted to exempt property using the state laws.
Married Couples May Double Indiana Exemptions
Married couples filing a joint bankruptcy in Indiana may “double” the exemption amount. The effect of this rule is that each spouse may claim the full exemption amount for any property in which the spouse has ownership interest. So, for example, if both spouses own a piece of artwork, if they file jointly, they can double the amount of their personal property exemption in order to keep the artwork.
Common Indiana Exemptions
Here are some of the most common exemptions available under Indiana law:
Fraternal Benefit Society Benefits
All fraternal benefit society benefits are 100% exempt. Ind. Code Ann. § 27-11-6-3.
Homestead or Residential Property
The homestead exemption protects a certain amount of equity in your home or principal residence. A debtor is allowed to exempt up to $17,600 in a residence. In addition, any interest that debtor has in a real estate held as a tenant by the entirety is exempt. Ind. Code Ann. §34-55-10-2.
For more details about how the homestead exemption works in Indiana, see The Indiana Homestead Exemption.
Life insurance policies that name the insured spouse, children, dependent relatives, or any creditor as a beneficiary and the proceeds of such policies are exempt from claims against the insured and the insured’s spouse.
Mutual life and accident insurance proceeds are exempt from debts of both policy holder and beneficiary.
The right to benefits under a life insurance contract may be contractually exempt from liability for the beneficiary’s debts.
Group policies and their proceeds are 100% exempt. Ind. Code Ann. §§ 27-1-12-14, 27-1-12-29, 27-2-5-1, and 27-8-3-23.
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.
To learn more about how to exempt your motor vehicle under Indiana law, visit The Indiana Motor Vehicle Exemption in Bankruptcy.
Indiana has adopted the provision of the Uniform Partnership Act that exempts a partner’s interest in specific partnership property. Ind. Code Ann. § 23-4-1-25.
Pension and Retirement Benefits
Certain pension benefits for public employees are exempt. Ind. Code Ann. § 5-10.3-8-9.
You may exempt the following personal property:
- nonresidential real estate or tangible property up to $9,350
- intangible personal property up to $350
- all health aids
- any interest in a qualified retirement plan, and
- a debtor’s interest in a refund or credit under IRC § 32.
Ind. Code Ann. § 34-55-10-2.
Unemployment compensation benefits are 100% exempt until they are actually received by the debtor. Ind. Code Ann. § 22-4-33-3.
All workers’ compensation is 100% exempt except for child support claims. Ind. Code Ann. § 22-3-2-17.
Confirming the Status of Indiana’s Bankruptcy Exemptions
Indiana’s exemption amounts are adjusted periodically. To make sure you have the most recent figures, be sure to check for any updates at the official website of the Indiana Code at www.in.gov/legislative/ic/2010.
For a list of other common exemptions in Indiana, see Indiana Bankruptcy Exemptions.