The economic wave of 2020 crashed in bankruptcy court. According to the American Bankruptcy Institute (ABI), more than 17,000 Indiana residents filed under one of the three more common chapters: 7, 11, and 13. Indiana law, however, affords some protection for those who may undergo the process in the form of statutory exemptions. Among the varied assets exempted, one applies to the pensions of public employees.
Billions of dollars beyond the reach of creditors
Federal law grants discretion to each state whether to restrict filers to exemptions it has created or those set by Congress. Having chosen the former (with a very few exceptions), the Hoosier State has seen a more than 25% drop in filings between the 2019 and 2020 calendar year, according to ABI. For the year 2019, the equivalent of more than 400,000 full-time public employees accounted for a payroll of more than $1.3 billion. The effect of this exemption permits employees to keep the pension after having filed.
Exemptions apply broadly to a various assets
The breadth of statutory extends to numerous types of assets for all who satisfy the residency requirements. From homestead and personal property to certain insurance and public benefits, exemptions permit filers to maintain some quality of life despite their financial situation. Another wave will surely rise from the recent turbulence. An attorney well-versed in bankruptcy can offer guidance on which type would provide the best long-term planning for your situation.