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- Indiana Homestead
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(Portions reprinted by permission from How to File for Chapter 7 Bankruptcy, Nolo © 1989-2019 )
Indiana Bankrupcty Exemptions Summary
(details below...)
Federal Bankruptcy Exemptions NOT Available in Indiana
Indiana has opted out of the Federal Exemptions (see below)Homestead
Real or personal property used as residence to $19,300 (husband and wife may double);
Property held as tenancy by the entirety may be exempt against debts incurred by only one spouse (more...)
Auto/Truck (aka Motor Vehicle)
No specific exemption (more...)
Personal Property
Health aids
Health or medical savings accounts under state or federal law.
Education or college savings accounts under IRC 529 or 530, contributions made at least 1 year before filing.
(more...)
Wild Card
$10,250 of any real estate or tangible personal property, $400 of any intangible personal property, except money owed to you (more...)
Wage Garnishment Law
Minimum 75% of earned but unpaid weekly disposable earnings, or 30 times the federal hourly minimum wage; bankruptcy judge may authorize more for low-income debtors (more...)
More Indiana Exemptions...
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Disclaimer
Disclaimer
Citations and links to primary law and secondary sources are provided for those who wish to do further research. Every effort has been made to make this information up to date and accurate, but laws can and do change without notice. Persons relying on this information are responsible for confirming its timeliness and accuracy before relying on it. (This information was updated for April 2019.)
Also bear in mind that these brief summaries do not list every detail or exception to these exemptions. For example, there are often exceptions for collection of child support debt and/or taxes. These listings are designed to inform you of laws that exist for your benefit, so that you may exercise what rights you may have.
Finally, this website is intended to provide information only. It cannot answer whether your property does or does not qualify for a specific exemption.
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Indiana Bankruptcy Exemptions
Federal Bankruptcy Code Exemptions Not Available in Indiana
Although the federal bankruptcy code provides a list of exemptions, these exemptions are not available in Indiana. Indiana law requires you to use the exemptions found in state law -- not the U.S. bankruptcy code.
Federal "non-bankruptcy" exemptions are available
However you are entitled to use so-called federal "non-bankruptcy" exemptions in addition to your state law exemptions. Non-bankruptcy exemptions are those found provisions of U.S. law that are not part of the bankruptcy code.
The four most significant non-bankruptcy exemptions are for
- Wages (a general cap on what percentage of your wages can be garnished),
- Social Security benefits,
- Civil Service benefits,
- Veterans Benefits
Other so called "non-bankruptcy" exemptions mostly deal with various benefits to government and military personnel, with a few odd laws regarding specially-regulated labor markets such as railroad workers, seamen, and longshoremen.
Special Notes regarding Indiana exemptions:
A $10,000 cap on total amount of exemptions exemptions was removed from Indiana law in 2005. There is no longer any cap. Amounts are adjusted every six years for inflation, starting in 2010. §34-55-10-2.5 See http://www.in.gov/legislative/iac/20180321-IR-750180155ERA.xml.html
Can you double exemptions for joint filers? (General principles)
If you are married and filing together, you and your spouse must use the same law; one cannot use federal law while the other uses state law. However, the exemption law chosen applies separately to each spouse. Thus, it is generally possible to double the amount of state law exemptions, Cheeseman v. Nachman, 656 F.2d 60 (4th Cir. 1981) (married couple filing a joint petition was entitled to double the Virginia homestead exemption), unless state law (e.g. California) specifically prohibits a couple from doubling certain exemptions. See First National Bank v. Norris, 701 F.2d 902 (11th Cir. 1984)(Alabama); Granger v. Watson, 754 F.2d 1490 (9th Cir. 1985)(California).
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Indiana Homestead Exemption
Home Valuation tools
Zillow.com Recommended! Wonderful tool that shows home values in your neighborhood. This link will take you to a listing of the average home value in your zip code. Just add your street address to get an estimate of the value of your house, and all others in your neighborhood. (Note: Does not serve all areas, and valuations are imperfect estimates only.)
Yahoo Real Estate offers comparable home sales in your neighborhood.
Almost every state provides protection for equity in the family home, and many states have increased the amount of protection in recent years. Seven states offer unlimited protection. Most states are not as generous.
see also wildcard exemption
New Federal Residency Requirement
Under the new bankruptcy law, you must be have lived in the state for at least 40 months (three years and four months) before you can claim any homestead protection greater than $160,375. (If your state's exemption offers less than this amount, the law is irrelevant to you.) The law is poorly worded but seems to say that if you move from one home to another in the same state, you can claim that state's homestead protection.
Special notes about Indiana Homestead Exemptions: see also wildcard exemption
- IN Exemptions
- Property held as tenancy by the entirety may be exempt against debts incurred by only one spouse
Ind. Code Ann. § 34-55-10-2 (c)(5)
- Real or personal property used as residence to $19,300 (husband and wife may double);
Ind. Code Ann. § 34-55-10-2 (c)(1)
Ind. Code Ann. § 34-55-10-2 (c)
Ind. Code Ann. § 34-55-10-2.5 (***exemption amount adjusted every six years, starting in 2010, by the department of financial institutions)
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Tenancy by Entirety Exemption
Tenancy by the Entirety (TBE) is a form of property ownership, based on traditional English common law, that is still recognized in about 1/2 of states and the most common form of martial property ownership in many of them.
It protects property that is jointly owned by a married couple as an "entirety" -- which is to say, as a single marital entity, not as individuals.
Tenancy by the Entirety (TBE) was originally conceived as a debt shield -- a way of protecting wives and children from being left homeless and penniless as a result of the debts of a husband. Under the English common law TBE doctrine, a husband could not sell property owned by "the entirety", or give it away, or pledge it as security for a loan without the consent of his wife.
Today, 25 states still recognize some form of tenancy by the entirety, but they differ on the extent to which the property is exempt.
- Property held as tenancy by the entirety may be exempt against debts incurred by only one spouse
Ind. Code Ann. § 34-55-10-2 (c)(5)
- Tenancy by the entirety is recognized in Indiana. ICA 32-4-2-1. Any interest that a debtor has in real estate held as a tenant by the entirety is exempt under state law unless the debtor and spouse file a joint petition for relief. ICA § 34-55-10-2(b)(5).
Ind. Code Ann. § 34-55-10-2 (c)(5)
Ind. Code Ann. § 32-17-3-1
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Indiana Insurance exemptions
Virtually all states protect life insurance proceeds in some manner or another. Some restrict it to proceeds paid to a dependent. Many states also protect the cash-value or loan-value of insurance policies.
If a substantial amount of your assets are in life insurance, you may want to consult a professional to determine the extent to which those policies are exempt. The website AssetProtectionBook.com does particularly thorough job of covering Indiana insurance exemptions.
- Employer's life insurance policy on employee
Ind. Code Ann. § 27-1-12-17.1
- Fraternal benefit society benefits
Ind. Code Ann. § 27-11-6-3
- Group life insurance policy
Ind. Code Ann. § 27-1-12-29
- Life insurance policy, proceeds, cash value, or avails if beneficiary is insured's spouse or dependent
Ind. Code Ann. § 27-1-12-14
- Life insurance proceeds if clause prohibits proceeds to be used to pay beneficiary's creditors
Ind. Code Ann. § 27-2-5-1
- Mutual life or accident proceeds to extent necessary for debtor's reasonable living expenses.
Ind. Code Ann. § 27-8-3-23
In re Stinnet, 321 B.R. 477 (S.D.Ind. 2005)(I.C. 27-8-3-23 exemption limited to amount needed to satisfy debtor's reasonably necessary living expenses.)
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Miscellaneous other exemptions for Indiana
This category covers items like partnership property, alimony & support payments.
- Property of business partnership
Ind. Code Ann. § 23-4-1-25
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Indiana Pensions & Retirement Savings Exemptions
The new federal bankruptcy law now automatically exempts a virtually all tax-exempt pensions and retirement savings accounts from bankruptcy, even if you are using state law exemptions. 11 U.S.C. § 522(b)(3)(C). (See Help Topic: Special Rules For Retirement Accounts.)
Special
Rules for Retirement AccountsThe law protects up to $1,283,025 of any pension or retirement fund that qualifies for special tax treatment under Internal Revenue Code sections 401, 402, 403, 408, 408A, 414, 457, or 501(a).
- Firefighters
Ind. Code Ann. § 36-8-7-22
Ind. Code Ann. § 36-8-8-17
- Police officers
Ind. Code Ann. § 36-8-8-17
Ind. Code Ann. § 10-12-2-10
Ind. Code Ann. § 36-8-6-14
Ind. Code Ann. § 36-8-7.5-19(indianapolis)
- Public employees
Ind. Code Ann. § 5-10.3-8-9
- Public or private retirement benefits and contributions, IRAs, (Contributions other than Roth IRAs must be tax-deductable)
Ind. Code Ann. § 34-55-10-2 (c)(6)
- Sheriffs
Ind. Code Ann. § 36-8-10-19
- State teachers
Ind. Code Ann. § 5-10.4-5-14(New 2006 teachers pension law. Replaces 21-6.1-5-17)
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Indiana Personal Property Exemptions
Auto Valuation Tools:
Both of these websites offer interactive tools to determine the current value of your used car.
This category covers your car, your non-retirement bank accounts, and most of your other personal possessions, other than your house.
States vary widely on how generous they are in this area. Some exemptions may be for any combination of property up to an aggregate amount. Other exemptions apply only to specific items, such as jewelry.
Remember that an exemption will not protect your car from being repossessed by the holder of the car loan you used to purchase the vehicle if you pledged the vehicle as security for the loan. To keep the car, you will have to pursue other options such as 'redemption' or 'reaffirmation.' See the help topics and How to File for Chapter 7 Bankruptcy for more on this.
Special notes about Indiana Personal Property Exemptions: see also Wild Card exemption
- $400 of any intangible personal property, except money owed to you
Ind. Code Ann. § 34-55-10-2 (c)(3)
- Education savings accounts and prepaid tuition; unlimited for contributions made at least two years prior to filing; to $5,000 for contributions made between 1 and years prior to filing. No exemption for contributions made less than 1 year prior to filing.
Ind. Code Ann. § 34-55-10-2 (c)(9)(529(b) tuition programs)
Ind. Code Ann. § 34-55-10-2 (c)(10)(530(b) education savings accounts)
- Health aids
Ind. Code Ann. § 34-55-10-2 (c)(4)
- Money in medical care or health savings accounts
Ind. Code Ann. § 34-55-10-2 (c)(7)(state medical care savings accounts)
Ind. Code Ann. § 34-55-10-2 (c)(8)(federal health savings accounts)
Ind. Code Ann. § 6-8-11-19(state medical care savings accounts)
- Spendthrift trusts
Ind. Code Ann. § 30-4-3-2
- Survivng spouse's share of decedents property
Ind. Code Ann. § 34-55-7-9
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Indiana Public Benefits Exemptions
Most states exempt public benefits, consistent with the notion that such benefits are intended as a safety net for the recipient.
- Compensation from the supplemental state fair relief fund under 34-13-8
Ind. Code Ann. § 34-55-10-2 (c)(13)
- Crime victims' compensation, unless seeking to discharge the debts for which the victim was compensated
Ind. Code Ann. § 5-2-6.1-38
- Earned income tax credit under Federal and state law
Ind. Code Ann. § 34-55-10-2 (c)(11)
In re King, 508 B.R. 71 (Bankr. N.D. Ind. 2014) (EIC funds retain exempt status if deposited in bank account, if funds are traceable)
In re Jackson, No. 12–9635–RLM–7A (Bankr.S.D.In. 2013) (exemption does NOT include federal child tax credit)
- Unemployment compensation
Ind. Code Ann. § 22-4-33-3
- Veterans disability benefits
Ind. Code Ann. § 34-55-10-2 (c)(12)
- Workers' compensation
Ind. Code Ann. § 22-3-2-17
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Indiana Tools of Trade Exemptions
These are the things you use to make a living. An automobile or truck can be a tool of trade if you use it as such. Commuting to work doesn't count, but if driving is a necessary component of transacting your business, you can claim your vehicle is a tool of trade.
- National guard uniforms, arms, & equipment
Ind. Code Ann. § 10-16-10-3
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Indiana Wage Garnishment Laws
Most states have a wage garnishment law. In some states, wage garnishment laws can be used in bankruptcy as an exemption to protect income that you had coming due, but not yet received, as of the day you filed, for work you had already done -- so called "earned but unpaid wages".
In some states, the wage garnishment law protects not only wages owed to you, but also wages already in your possession and saved over time preferably holding it in a separate bank account. In other states wage garnishment laws do not protect wages once they are they are in your possession.
There is a federal wage garnishment protection found in the CCPA (Consumer Credit Protection Act), 15 U.S.C. § 1673, which limits how much of your pay can be taken for collection purposes. But this law law is generally found not to be an exemptions in bankrupty. See, e.g. IN RE HORTON, Case No. 10-53495., Bankr. ED Kentucky, 3/4/2011
Some courts have also held that some state wage garnishment laws do not create an exemption in bankruptcy. See, eg. Utah, Tennessee, Vermont, Missouri.
Other courts have held that state garnishment statutes DO create an exemption. See, e.g., Oregon, Iowa, Ohio, Kansas, Indiana.
And in Illinois there are recent published bankruptcy court opinions going both ways on the issue of whether Illinios wage garnishment law can be used as an exemption in bankruptcy.
Click here for collected case law on the question: Do wage garnishment laws create an exemption in bankruptcy?
Finally, if you live in a state that lets you use the Federal bankruptcy exemptions in 522(d), and you choose to use them, then you get no exemption for earned but unpaid wages; the wildcard exemption is your only option. See, e.g. U.S. v. Christensen, 200 B.R. 869 (D.S.D. 1996) (applying FDCPA law, based on similar statutory structure to bankruptcy's opt-out law)
Special notes about Indiana Wage Garnishment Exemptions: Indiana's wage garnishment law was found to create a bankruptcy exemption in In re Haraughty, 403 BR 607 (Bankr. SD Indiana 2009)
- Minimum 75% of earned but unpaid weekly disposable earnings, or 30 times the federal hourly minimum wage; bankruptcy judge may authorize more for low-income debtors
Ind. Code Ann. § 24-4.5-5-105
In re Haraughty, 403 BR 607 (Bankr. SD Indiana 2009)
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Indiana Wild Card Exemption
Most, but not all, states allow a so-called "wild-card" exemption that can apply to any property. The wild card exemption can be of particular help if one or more of your other exemptions falls short of protecting your equity. You may split your wild card exemption amount over multiple items and stack it atop other exemptions as needed to protect exposed equity.
- $10,250 of any real estate or tangible personal property.
Ind. Code Ann. § 34-55-10-2 (c)(2)
Excerpt from
