Indiana Bankruptcy Exemptions

Property You Can Keep After Filing Bankruptcy

Most people get to keep all of their assets when they file bankruptcy. In Indiana, some people occasionally lose a portion of their tax refund, but other times they get to keep their refund depending upon the particular case. Many people are under the assumption that when they file for bankruptcy, they will lose everything of value that they own.

However, there are exemptions that provide protection for property in your possession such as retirement accounts, vehicles, clothing, and homesteads. In order to help you understand the process of filing for bankruptcy and these exemptions, it is in your best interest to retain our attorneys at our office in Indianapolis to assist you in protecting your assets.  We offer free consultations that clients find to be an educational experience.

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You can count on John Steinkamp & Associates to help you get your finances back on track. In my 20 years of practice, I have helped almost 2,000 people file for bankruptcy. My firm is one of the most trusted bankruptcy law offices in the Indianapolis area and my professional team of attorneys and paralegals can help you better understand the process of filing, including exemptions.

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My firm has the knowledge, the skill and the experience to guide you through bankruptcy, and will make sure you properly use all the exemptions available to you. I am committed to providing you with personal, one-on-one service and will always put your best interests first.

Protecting Non-Exempt Assets

If assets are not exempt, you can still protect them in bankruptcy. One way to protect non-exempt assets is to file bankruptcy under Chapter 13 – a chapter frequently used to preserve home ownership when a debtor has too much equity in his or her house. While Chapter 7 Debtors do stand to lose non-exempt assets, Chapter 13 debtors pay their debts back through a trustee over time and are allowed to keep what they own. How much your Chapter 13 plan requires you to pay will depend on many factors, including the amount by which your estate is not exempt, your disposable income, the amount of equity you may have in your home, and your debts.

Assets can also be protected with “exemption planning”. Sometimes intangible assets such as checking accounts and savings accounts including IRAs are exempt if their dollar amount is low enough.   Statements from all bank accounts will have to be provided to a bankruptcy trustee to prove their value.  Tangible assets of value that may not be exempt such as cars, vans, trucks, and mobile homes can still be retained even in a chapter 7 bankruptcy if the consumer chooses to reaffirm the debt owned on those specific times. 

If you work with an attorney and are careful you may be able to convert non-exempt assets into exempt assets. For example, if you own a non-residential cabin and a professional real estate agent appraises it to be worth less than it may otherwise appear, that could result in it becoming exempt.  This process is complicated; however, and should not be attempted without professional advice from my office.

In order to avoid fraud, never attempt to sell or transfer non-exempt assets without first meeting with a bankruptcy attorney. Transfers can seriously complicate a bankruptcy and many Indiana debtors find they must wait up to 4 years to file a bankruptcy because they did not consult with an attorney before they committed the transfer.

Frequently Asked Questions Regarding Indiana Bankruptcy Exemptions

Q: My family residence is completely paid off and I no longer owe my former creditor.  Will I be able to keep my home?
A: Yes, but you will likely need to file a chapter 13 to preserve your home  ownership.

Q: My spouse and I have a child.  His grandparents recently set up a trust account for his benefit that should last the rest of his life.  We are not trustees on the account and have absolutely no access to it whatsoever.  Will the court or bankruptcy trustee view that as an asset of mine?
A: No.

Q: My employees use their own tools while they work for me.  Could my workers’ tools of which I have no ownership and are never in my possession be considered assets of mine?
A: No.

Q: When does my current compensation from my employer become my asset?
A: Once it enters your bank account.

Q: I own stock in a life Insurance company.  Will there be a forced liquidation if I file bankruptcy?
A: No.  You can keep your stocks when you file a chapter 13.

Q: I am a tenant of an apartment complex.  I know that the studio apartment that I rent is considered my residence, but is it also considered to be one of my assets?
A: No. 

Q: My Unemployment Compensation enters my checking account every Monday. Is that money still considered an asset even though it is unemployment compensation?
A: Yes.

Q: My son just paid me back for a loan with a check that I deposited in my checking account last week.  Is that money now considered part of my assets?
A: Yes.

Q: I have a considerable sum of money in my bank account.  However, I also suffer from a disability.  Will the fact that I have a disability increase the exemption limit when it comes to the amount of money that I have in my bank account?
A: No.

Q: My spouse and I own our family residence jointly as a couple.  Does the fact that we own it jointly have any impact on the exemption limit?
A: Yes.

Q: Does Indiana state law govern all aspects of bankruptcy exemptions? 
A: No.  Federal statutes may apply in certain instances. 

Q: I own a valuable antique rotary phone.  Is it considered an asset?
A: Yes.

Q: Will I be picking and choosing which things I think of as assets at my own discretion?
A: No, whether something is considered an asset is determined by law.

Q: I own a condominium in another state.  I only stay there occasionally for weekend getaways.  I know that means that it is not my residence, but is it an asset?
A: Yes. 

Q: My father told me that I am the designated beneficiary on his savings account.  I have no access to that money currently and will not until after he passes away, assuming he does not change his designated beneficiary before then.  Is his savings account considered a current asset of mine?
A: No.

Q: I set up a new checking account for the sole purpose of receiving alimony payments from my ex-husband.  Is the money in that account considered as an asset of mine?  
A: Yes.


Unsure of whether or not bankruptcy is right for you? Want to see if you are eligible for bankruptcy? I am ready to discuss all your options with you in a free case evaluation. Find trusted, dedicated advice today at John Steinkamp & Associates.

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