Indiana Bankruptcy Exemptions

Updated February 8, 2019

Filing for bankruptcy in Indiana doesn’t mean that you’ll lose everything. Using Indiana’s bankruptcy exemptions, you can keep the property you’ll need to maintain a home and employment, such as furnishings, clothing, and a retirement account.

Learn more about filing an Indiana bankruptcy.

Indiana Exemptions v. Federal Bankruptcy Exemptions

Some states allow residents to choose between the state and federal bankruptcy exemptions, but Indiana isn't one of them. You'll use the Indiana's state exemption laws. However, the federal nonbankruptcy exemptions will be available to you, too.

Common Indiana Bankruptcy Exemptions

Here are some exemptions that are used commonly in Indiana. When reviewing them, you’ll want to consider the following:

• Joint filing. Unless otherwise noted, when spouses file together in Indiana, each spouse can claim the full amount of the exemption (informally called “doubling”) as long as each spouse has an ownership interest in the property.
• List and verify your exemptions. You must claim an exemption by listing it in the official bankruptcy forms. You might qualify for exemptions not included in this article, or be required to meet qualification requirements. Consulting with a local bankruptcy attorney is the best way to ensure that you’re protecting your assets.
• Legal citations. You’ll find each of the statutes in the Indiana Code or the federal law.

Indiana Homestead Exemption

34-55-10-2 – Equity in real estate or personal property used as a residence up to $19,300; equity in real estate held as tenants by the entirety might be fully exempt if only one spouse files for bankruptcy.

Indiana Motor Vehicle Exemption

None.

Indiana Wildcard Exemption

34-55-10-2(c)(2) – Up to $10,250 in any real estate or tangible personal property of the filer’s choosing.

Other Indiana Exemptions

Personal Property

34-55-10-2 - Health aids; funds in medical savings accounts and health savings accounts; up to $400 of intangible personal property (except for money owed to you).

Pensions

11 U.S.C. § 522 - Tax exempt retirement accounts (including 401(k)s, 403(b)s, profit-sharing and money purchase plans, SEP and SIMPLE IRAs, and defined benefit plans); IRAS and Roth IRAs to the maximum amount. (This amount is set by federal law. See Federal Bankruptcy Exemptions for updates on this dollar amount.)

5-10.3-8-9 - Public employees.

36-8-8-17; 10-12-2-10 - Police officers.

5-10.4-5-14 - State teachers.

36-8-7-22; 36-8-8-17 - Firefighters.

Public Benefits

34-55-10-2(c)(11) - Earned income tax credit.

22-3-2-17 - Workers' compensation.

22-4-33-3 - Unemployment compensation.

Tools of Trade

10-16-10-1 - Military arms, uniforms, and equipment.

Insurance

27-1-12-14 - Life insurance policy or proceeds if the beneficiary is spouse or dependent.

27-1-12-29 - Group life insurance policy.

27-2-5-1 - Life insurance proceeds if policy prohibits use to pay creditors.

27-8-3-23 - Mutual life or accident policy proceeds as needed for support.

27-11-6-3 - Fraternal benefit society benefits.

27-1-12-17.1 - Employer's life insurance policy on an employee.

Other

23-4-1-25 - Specific business partnership property.

34-55-10-2(c)(9), (10) - Education savings account (529 and Coverdell) contributions made more than two years prior to filing; other conditions apply.

30-4-3-2 - Spendthrift trusts.

Add any applicable federal nonbankruptcy exemptions.

Nonexempt Property—Property You Can’t Protect With an Indiana Exemption

Some people can keep all assets, but that isn’t always true. Here’s what will happen to nonexempt property:

• In a Chapter 7 bankruptcy, the bankruptcy trustee appointed to administer your case will sell nonexempt property and distribute the proceeds to creditors. Find out more about the bankruptcy process and the Chapter 7 documents you'll need at each stage.
• In Chapter 13 bankruptcy, it works differently. You can keep everything you own, but you’ll pay creditors the value of the nonexempt property, your disposable income, or your nondischargeable debt (support obligations, most taxes, and the like), whichever is more, through your Chapter 13 repayment plan.

You’ll learn more about Chapter 7 and 13 in Which Type of Bankruptcy is Right for Me?

Confirming Indiana Exemptions

This list includes the majority of bankruptcy exemptions available in Indiana, but not all. Specific exemptions could have qualification requirements, and amounts might have changed since this list was last updated. Check the Indiana Code or with a local bankruptcy lawyer.

To learn more about bankruptcy exemptions, the state exemption system, and the homestead exemption rules, read Bankruptcy Exemptions – What Can I Keep When I File for Bankruptcy?