When some people hear words like “bankruptcy” and “liquidation,” they immediately think of frightening scenarios where practically everything they own gets taken away as punishment for their debt problems. This is not the reality. Bankruptcy is not a penalty, but a legal process designed to help people and businesses overcome severe debt problems. This would be extremely difficult if someone who filed for bankruptcy protection lost everything once their case was closed.
Indiana offers several exemptions to state residents so that they can meet their basic needs during and after their bankruptcy proceedings. These carve-outs include:
- Homestead exemption — Someone who is the sole owner of their Indiana residence is allowed to maintain up to $19,300 in equity on their primary residence. This means that if your remaining mortgage obligation is within this amount of your home’s market value, you should be able to hold on to your property. In the event that the equity exceeds that level, you might want to consider a Chapter 13 filing.
- Preservation of pension, retirement and education accounts — Federal law typically exempts creditors from reaching assets you have within a tax-exempt retirement plan. Other pension and retirement benefits might also be exempt from a Chapter 7 liquidation. Any deposits you make to an education account, such as a 529 or Coverdell, are also protected as long as the funds were transferred more than two years prior to your bankruptcy filing.
- Wild-card exemption — Each person has different assets and priorities. Accordingly, the state has a wild-card exemption under which you can shield up to $10,250 in tangible property or nonresidential real estate. You could use this to keep your car from being sold off to pay your debts.
When you speak with a qualified Chapter 7 bankruptcy lawyer, they will examine your circumstances and explain in detail how particular exemptions apply so that you gain an informed perspective on how a debt discharge under Chapter 7 will affect your daily life.
Weiss, Schmidgall and Hires, P.C. in Merrillville represents clients in Chapter 7 bankruptcy proceedings and other debt relief matters. To schedule a free initial consultation regarding your options, please call 219-293-8988 or contact us online.
About Victoria Bain joined Weiss, Schmidgall & Hires as an associate attorney in 2023. She is a graduate of The University of Illinois Chicago School of Law. Victoria received her Bachelor of Arts in Political Science from Valparaiso University. During her time in college, she taught classes to incarcerated men at the Westville Correctional Facility,…
For more than ten years, Christopher Schmidgall has protected the lives of people who find themselves caught in the tangled machinery of criminal prosecution. With the skill and determination he’s demonstrated throughout his life, Chris offers them the help they need to get their lives back in order. Not long after graduating from Valparaiso...
Following a remarkably accomplished academic career, Amanda Hires applied her record of success to servicing good people facing difficult situations. She served as a volunteer at the New Orleans Public Defender’s Office and worked intensively with prosecutors and defense attorneys while under the guidance of Judge Sheila Moss at the Lake County Superior Court...
Jessica McPheeters is an associate attorney with her primary focus being in Estate Planning, Probate, Business Formation and Planning, and other general practice matters. Jessica received her Bachelor of Science in Business Administration with a concentration in Economics from Ball State University in 2014. Jessica then received her Juris Doctor from Valparaiso University School of Law...
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