In a Chapter 7 bankruptcy, the trustee takes over your estate and looks for valuable property that could be liquidated to repay creditors. However, Indiana allows debtors to protect some of their property by exempting it from the bankruptcy estate. In these cases, the property cannot be liquidated to repay creditors. In this article, the Dansville, IN, Chapter 7 bankruptcy attorneys at Chris Arrington will discuss bankruptcy exemptions in the State of Indiana.
Chapter 7 Bankruptcy Exemptions in Indiana
Indiana offers debtors a number of ways to protect their property from liquidation. Below, we will list various ways that you can protect your property from liquidation.
- Indiana’s homestead exemption – Indiana affords debtors the right to protect $19,300 of equity in real estate. The homestead exemption specifically applies to residential property or tangible personal property such as a mobile home. This exemption only applies to your place of residence. It does not include other real estate that you use as an investment. Spouses who file for bankruptcy together can double that amount and protect $38,600 of equity in their home.
- Indiana’s wildcard exemption – The wildcard exemption allows you to protect $10,250 in non-residential property. This includes anything that you own that would otherwise be subject to liquidation in Chapter 7. The wildcard exemption can also be used to protect equity in a vehicle that you own. It often is used for this purpose.
- Pensions and retirement accounts – Certain pensions and retirement accounts are exempted from Chapter 7 liquidation entirely. These include pensions and IRAs. If you are a police officer, firefighter, or public employee, your retirement accounts are automatically exempted.
Certain types of personal property can also be exempted from liquidation in Chapter 7. You do not need to use your wildcard exemption to protect these types of property. Exempt property includes:
- Education savings account
- Health aids
- Health savings account
- Interest in a refund or earned income credit
- Life insurance policy proceeds
- Medical care savings account
- Military equipment, including arms or uniforms
- Qualified tuition program
- Specific partnership property
- Spendthrift trusts
- Unemployment compensation benefits
- Workers compensation benefits
- 75% of your earned but unpaid wages or 30 times the federal minimum wage, whichever is lower
When Can I Use Indiana’s Bankruptcy Exemptions?
You have the option of filing under Indiana’s bankruptcy rules or the federal government’s. In most cases, a debtor would choose to file under Indiana’s state rules because the benefits are greater. One caveat is that you must live in the state for at least 730 days prior to using our state’s bankruptcy exemptions. To qualify for the homestead exemption, you must have purchased the property and resided there for at least 1215 days prior to filing.
Talk to a Dansville, IN, Chapter 7 Bankruptcy Attorney Today
Chris Arrington represents the interests of debtors in bankruptcy filings. Call our office today to schedule a free consultation, and we can begin discussing how to reset your finances right away.