Bankruptcy is governed by federal law, so the process to file for Chapter 7 bankruptcy or to file for Chapter 13 bankruptcy is nearly identical in every state, including Indiana. However, Indiana law plays an important role, especially in setting property exemptions, which determine what property you get to keep (if you file for Chapter 7) and how much you have to repay your creditors (if you file for Chapter 13). There are also important resources available to you by state.
Credit Counseling in Indiana
Before you file for Chapter 7 or Chapter 13 bankruptcy in Indiana, you will have to get credit counseling from an agency approved by the United States Trustee’s Office. Here’s a list of agencies in Indiana that have been approved to provide this counseling.
Where to File for Bankruptcy in Indiana
There are two bankruptcy districts in Indiana. You can find local rules, forms, and information on bankruptcy filings at the district bankruptcy court websites.
- The Northern District (with courthouses in Fort Wayne, Hammond, South Bend, and Lafayette)
- The Southern District (with courthouses in Indianapolis, Terre Haute, Evansville, and New Albany)
Like every other state, Indiana has a set of property exemptions. (To learn more about how property exemptions work generally and which exemptions you may use, see Bankruptcy Exemptions: What Do I Keep When I File for Bankruptcy?)
Some states let bankruptcy filers choose between the state’s list of exemptions and a list of federal exemptions, but Indiana is not one of them.
Filers in Indiana may exempt up to $17,600 in home equity. They may also exempt contributions they’ve made to education savings accounts: Those contributions are fully exempt if made more than two years before filing; exempt up to $5,000 if made at least a year before filing, and not exempt if made in the year before filing. Indiana also has a wildcard exemption of $9,350, which filers may apply to any property they wish. Here’s a list of Indiana property exemptions.
The Means Test
When you file for bankruptcy, you must compare your income to the median income for a household of your size in Indiana. If your income is less than the median, you will be eligible to file for Chapter 7 and, if you choose to file for Chapter 13, you can use a three-year repayment plan (rather than five years).
Currently, the median income for a one-person household in Indiana is just under $40,000; these figures change periodically. You can find the most recent amounts on the website of the U.S. Trustee at www.justice.gov/ust. Click on “Bankruptcy Reform,” and then “Means Testing Information.” Or go directly to the Census Bureau table here.
Debtor Education in Indiana
After you file for bankruptcy but before you receive your discharge, you must take a debtor education course. Like the mandatory credit counseling you must take before filing your forms, you must receive debtor education from an agency approved by the U.S. Trustee’s Office. Here is a list of agencies in Indiana that are approved to provide this counseling.
Finding a Bankruptcy Lawyer
If you're considering bankruptcy, you may want to talk to an experienced Indiana bankruptcy lawyer.