Filing for bankruptcy can feel overwhelming, but understanding exemptions helps you keep essential property. In Indiana, certain assets are protected, allowing you to maintain stability while addressing debt. Knowing what you can keep makes the process less stressful.
Homestead exemption
Your home is one of the most significant assets you may own. Indiana law protects up to $22,750 in home equity for an individual and $45,500 for a married couple. This exemption applies to real estate used as a primary residence. If equity exceeds this limit, the court may require selling the property to repay creditors.
Personal property protections
Indiana allows you to keep up to $12,100 in personal property. This includes household goods, furniture, clothing, and other essential items. Additionally, the state protects up to $400 in cash or bank account funds. If you own a vehicle, the exemption covers up to $4,000 in equity, meaning you may keep your car if it falls within this limit.
Wages, retirement, and other benefits
Certain income sources remain protected during bankruptcy. Social Security, unemployment, workers’ compensation, and disability benefits are fully exempt. Retirement accounts, including 401(k) plans and IRAs, are also shielded. Additionally, 75% of disposable weekly earnings or 30 times the federal minimum wage—whichever is greater—are protected from wage garnishment.
Life insurance and wildcard exemption
Life insurance proceeds are exempt if the beneficiary is a dependent. Indiana also offers a wildcard exemption of $10,250, which applies to any property of your choice. This flexible option helps protect assets that don’t fall under standard exemptions.
Keeping necessary assets while clearing debt
Indiana’s exemptions help protect your home, car, personal property, and income while eliminating debt. Understanding these protections ensures you retain essential assets and move forward with financial stability.
