Like all states, Indiana has a set of exemptions you can use to protect some property when filing for bankruptcy, such as a home, car, and retirement account. In this article, you'll learn:
If you have more questions, read Filing for Bankruptcy in Indiana. Not only will you find answers, but it includes helpful checklists and a link to an interactive bankruptcy quiz. Or, try the start-to-finish "Filing for Bankruptcy" guide.
You can protect property covered by an exemption regardless of whether you file for Chapter 7 or 13. But each chapter treats nonexempt property, things not covered by an exemption, differently.
You can file for bankruptcy in Indiana after living there for over 180 days (or the greater portion of 180 days before filing). But before using Indiana's exemptions, you must live in Indiana for 730 days before filing for bankruptcy. Otherwise, you'd use the previous state's exemptions.
For example, suppose you weren't living in any one state during the two years before filing for bankruptcy. In that case, you'd use the exemptions of the state you lived in for most of the 180 days before the two-year period immediately preceding your filing. (11 U.S.C. § 522(b)(3)(A).)
Learn more about filing for bankruptcy after moving to a new state.
Use the list below to determine whether you can protect property important to you. Although federal bankruptcy exemptions aren't available in Indiana, keep in mind that spouses who share an ownership interest in property can double the corresponding exemption. Also, all filers are entitled to:
Learn more about retirement accounts in bankruptcy.
Unless otherwise noted, all law references are to the Indiana Code.
You can protect up to $19,300 of equity in real estate or tangible personal property. Indiana's homestead exemption applies to residential property or tangible personal property (such as a mobile home) that constitutes your personal or family residence. As a result, a homestead in Indiana can include a home, condominium, trailer, or farm.
Spouses who file bankruptcy jointly and co-own a home can double the exemption amount. Also, any interest that the debtor has in real estate held as a tenant by the entirety might be exempt if only one spouse files for bankruptcy (this can be tricky so consider consulting with an attorney). (Ind. Code §§ 34-55-10-2(c)(1), (5).)
Learn more about protecting your home in bankruptcy.
Indiana does not have a specific motor vehicle exemption, but you can use Indiana's wildcard exemption to protect the equity in your car, truck, van, or another vehicle. Find out about protecting cars in bankruptcy and how the motor vehicle exemption works in a Chapter 7 case.
You can protect any nonresidential real estate or tangible property up to $10,250. (Ind. Code § 34-55-10-2(c)(2).) You can also protect up to $400 of intangible personal property. (Ind. Code § 34-55-10-2(c)(3).) Learn about the wildcard exemption in bankruptcy.
Pension and Retirement Benefits
The following pensions and retirement benefits are exempt in bankruptcy:
You can exempt the following personal property:
Miscellaneous Indiana Exemptions
Indiana's Department of Financial Institutions adjusts state exemption amounts every six years. The next adjustment will be made in 2022. To find the statute itself, check the Indiana General Assembly or consult with a local bankruptcy lawyer. Learn about finding state statutes in Laws and Legal Research.
You can file for bankruptcy in Indiana after living there for over 180 days. However, you must live in Indiana much longer before using Indiana exemptions, at least 730 days before filing, to be exact. Otherwise, you'd use the previous state's exemptions.
But suppose you weren't living in any particular state during the two years before filing for bankruptcy. In that case, you'd use the exemptions of the state you lived in for most of the 180 days before the two-year period immediately preceding your filing. (11 U.S.C. § 522(b)(3)(A).)
Also, to claim the total value of the Indiana homestead exemption, you must have purchased and owned the property for at least 1,215 days before the bankruptcy filing. If you can't meet this requirement, your homestead exemption is limited by federal law to $189,050 (valid for bankruptcy cases filed between April 1, 2022, and April 1, 2025).
If you don't exempt your property carefully, you could lose the property in bankruptcy. Answers to these questions might help you steer clear of common issues.
Do I automatically get to keep exempt property? Generally, no. Here's the procedure you'll need to follow: You'll select the exemption set that best protects your property, list the exempt assets and applicable exemption laws on Schedule C: The Property You Claim as Exempt, and file it with your other required paperwork.
Will someone check my exemptions? The bankruptcy trustee, the court-appointed official tasked with managing your case, will review Schedule C to ensure you have the right to protect the claimed property. A trustee who disagrees with your exemptions will file an objection with the court. The judge will decide whether you can keep the property.
Example. Jeff owns a rare, classic car worth $15,000, but the state vehicle exemption won't adequately protect it. Believing that the car qualifies as art—at least in his mind—Jeff exempts it using his state's unlimited artwork exemption. The trustee reviews Schedule C, disagrees with Jeff's characterization and files an objection with the court. After consideration, the judge will likely side with the trustee, determining that the vehicle doesn't qualify as a piece of art.
What if I make a mistake? Most trustees won't file an objection unless it's clear that the debtor is trying to pull something over on the court. At least not without trying to resolve the issue first. If there's a minor exemption problem, the trustee will likely call you to work out the matter informally.
It's worth noting that it's not a good idea to finesse exemptions. Not only do you have an obligation to supply correct information on your bankruptcy forms, but purposefully making inaccurate statements can be considered fraudulent. Bankruptcy fraud is punishable by up to $250,000, 20 years in prison, or both.
Did you know Nolo has made the law easy for over fifty years? It's true, and we want to ensure you find what you need. Below you'll find more articles that explain what bankruptcy is and how bankruptcy works. And don't forget that our bankruptcy homepage is the best place to start if you have other questions!
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We wholeheartedly encourage research and learning, but online articles can't address all bankruptcy issues or the facts of your case. The best way to protect your assets in bankruptcy is by hiring a local bankruptcy lawyer.
Updated September 20, 2023