How to Use Indiana Bankruptcy Exemptions

November 10, 2021

The Basic Indiana Bankruptcy Exemptions

Indiana bankruptcy exemptions protect your property when you file bankruptcy.  If you properly claim Indiana’s exemptions, you will not lose property in your bankruptcy case.   Knowing how to correctly use Indiana’s bankruptcy exemptions is very important.

The basic Indiana bankruptcy exemptions are simple.  You can protect four following things (assets):

  • $22,750 of value in your residence (per person)
  • $12,100 in personal property (including cars, also per person)
  • $450 in cash (or intangibles such as bank accounts or money owed to you)
  • 100% of most standard retirement accounts

It is also important to note that these are only the basic Indiana bankruptcy exemptions.  There are also several other exemptions both State and Federally based that are used on a less frequent basis.  As an example, these include the ability to protect social security money and child support.   Other exemptions can give special protections to married couples where only one spouse is filing for bankruptcy.   In addition, worker’s comp settlements are also frequently protected.  However, regular injury cases are not protected.

How to Claim Indiana’s Exemptions When You File

Indiana Bankruptcy Exemptions - How to claimThe actual operation of how to claim Indiana’s bankruptcy exemption is simple. After you have listed your property on Schedule A/B, you must list or “claim” your exemption on Schedule C.   You simply list your property again on this Schedule C form.  Then, you list out the proper exemption and amount next to each property entry.

The more complex part is actually understanding the exemptions.   It is also somewhat complex just to fill out the bankruptcy forms at all.  It would be wise to seek an attorney.  The attorney will make a plan with you based on what property you own.  Your attorney would also fill out all necessary documents and file them with the court.




Understanding Indiana’s Bankruptcy Exemptions

The “residence” exemption for $22,750 is sometimes hard to understand in Indiana.  This $22,750 is a relatively low number that could affect your house.   Essentially, you need to have less than $22,750 in equity to make sure your house is fully protected.  You will need to get a Comparative Market Analysis from a realtor in Indiana to back up the fact that you do not have much more than $22,750 in equity.   If you are married and both people’s names are on the house, you can usually double this amount to $45,500.

Another exemption that is hard to understand is the $450 “intangible” or cash exemption.  The hardest part to understand is that this exemption is very low.  It offers virtually no substantial protection to your bank accounts or money owed to you.  This means that you will lose overages of cash or any source of money owed to you when you file Chapter 7.  This even includes losing personal injury lawsuits, other legal claims, and inheritances.  You can also lose parts of your outstanding tax refunds.

Exemption planning is one of the essential elements that all bankruptcy attorneys examine when they file your case.  Although your attorney may not talk much about exemptions, every bankruptcy case is carefully planned with available exemptions in mind.   Then, all necessary exemptions are claimed.  For this reason, it is important to consult with an attorney before filing any Indiana bankruptcy case.

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