Chapter 7 Bankruptcy in Indiana: Exemptions and Court Locations - National Bankruptcy Forum (2023)

FAQs

What assets are exempt from creditors in Indiana? ›

In Indiana, the maximum amount of money that can be protected in a checking or savings account is $400 if you filing bankruptcy on your own, or $800 if you are filing as a married couple. In theory, any cash over these amounts can be taken by the trustee.

All states have designated certain types of property as "exempt," or free from seizure, by judgment creditors. For example, clothing, basic household furnishings, your house, and your car are commonly exempt, as long as they're not worth too much.

In many states, some IRS-designated trust accounts may be exempt from creditor garnishment. This includes individual retirement accounts (IRAs), pension accounts and annuity accounts. Assets (including bank accounts) held in what's known as an irrevocable living trust cannot be accessed by creditors.

No matter which form of bankruptcy is sought, not all debt can be wiped out through a bankruptcy case. Taxes, spousal support, child support, alimony, and government-funded or backed student loans are some types of debt you will not be able to discharge in bankruptcy.

As long as the equity (or how much value you actually own beyond loans and mortgages) of your house and cars do not exceed Indiana's limits for their Bankruptcy Exemptions, you can keep your house and cars.

You can keep cash in Chapter 7 bankruptcy if it qualifies as an exempt asset under bankruptcy exemption laws. You don't have to give up everything when you file for bankruptcy. You can keep any property that qualifies as an exempt asset—including cash.

Do they freeze your bank account when you file Chapter 7? ›

Do they freeze your bank account when you file Chapter 7? Generally, no. Especially if the full amount in the account is protected by an exemption. Some banks (most notably, Wells Fargo) have an internal policy of freezing bank accounts with a balance over a certain amount once they learn about a bankruptcy filing.

While you can purchase a car after bankruptcy, you should expect to pay a higher interest rate if you take out a loan. Although waiting for your credit score to improve can lower your rate, it's not always possible.

Chapter 7 bankruptcy erases or "discharges" credit card balances, medical bills, past-due rent payments, payday loans, overdue cellphone and utility bills, car loan balances, and even home mortgages in as little as four months.

If you declare bankruptcy, will you lose literally every dollar that you have in your savings? The answer is no: some cash can be exempted in a Chapter 7 case. For example, typically under Federal exemptions, you can have approximately $20,000.00 cash on hand or in the bank on the day you file bankruptcy.

And some states also allow judgment liens on the debtor's personal property -- things like jewelry, art, antiques, and other valuables. In Indiana, a judgment lien can be attached to either real estate or personal property.

The sheriff is specifically authorized to demand from the debtor the amount as per the warrant, and if the debtor cannot pay the amount in cash, the sheriff if authorized to take any movable assets that he or she finds on the premises, into attachment.

Can debt collectors see your bank account balance or garnish your wages? Collection agencies can access your bank account, but only after a court judgment.

Can a creditor take all the money in your bank account? ›

If a debt collector has a court judgment, then it may be able to garnish your bank account or wages. Certain debts owed to the government may also result in garnishment, even without a judgment.

Debts Never Discharged in Bankruptcy

Alimony and child support. Certain unpaid taxes, such as tax liens. However, some federal, state, and local taxes may be eligible for discharge if they date back several years. Debts for willful and malicious injury to another person or property.

Chapter 7 Bankruptcy Discharge Wipes Out Most Debts Forever

credit card debt. medical bills. personal loans and other unsecured debt.

The most common types of nondischargeable debts are certain types of tax claims, debts not set forth by the debtor on the lists and schedules the debtor must file with the court, debts for spousal or child support or alimony, debts for willful and malicious injuries to person or property, debts to governmental units ...

What Is Nondischargeable Debt? Nondischargeable debt is a type of debt that cannot be eliminated through a bankruptcy proceeding. Such debts include, but are not limited to, student loans; most federal, state, and local taxes; money borrowed on a credit card to pay those taxes; and child support and alimony.

You'll likely have to give up all of your credit cards if you file for Chapter 7 bankruptcy, but you can start rebuilding your credit once your case is closed. If you file for Chapter 7 bankruptcy and are hoping to hang onto one of your credit cards, you will likely be out of luck.

Debts not discharged include debts for alimony and child support, certain taxes, debts for certain educational benefit overpayments or loans made or guaranteed by a governmental unit, debts for willful and malicious injury by the debtor to another entity or to the property of another entity, debts for death or personal ...

After you submit your petition, the trustee will review the filing and schedule your meeting of creditors. This is usually around a month after your filing date, but it could be longer. Then, you will wait about 60 days further for the full discharge. After this occurs, you can buy a car immediately, if necessary.

Qualifying for a car loan after bankruptcy is doable, but it can take a little more work than buying a car when in good financial standing. The key to qualifying for a car loan after bankruptcy is to improve your credit score and save for a solid down payment.

Tax refunds can become complicated during a Chapter 7 bankruptcy. However, the bottom line is that your bankruptcy trustee will likely take a portion or all of your annual tax refund as part of the bankruptcy estate and use it to pay your creditors.

What property is exempt in Indiana? ›

Indiana Homestead Exemption

You can protect up to $19,300 of equity in real estate or tangible personal property. Indiana's homestead exemption applies to residential property or tangible personal property (such as a mobile home) that constitutes your personal or family residence.

This creditor protection can be a valuable tool in the event of a legal liability, personal injury lawsuit, or bankruptcy. Accounts that receive special protection include 401(k) plans, pension plans, profit sharing accounts, SEP IRAs, SIMPLE IRAs, 403(b) plans, 457 plans, traditional IRAs, and Roth IRAs.

In Indiana, the statute of limitations by judgment is ten years, but it can be renewed, further extending the collection period. This means once a creditor makes a charge against the debtor, the judgment is collectible for up to ten years.

All sealable property can be attached i.e. lands, goods, money, cheques, promissory notes, government securities, buildings debts and all other belongings of the judgement debtor may be attached and sold in execution of a decree against him by the Court.

There are four main ways to not pay a judgment: (1) use statutory exemptions, (2) use protected assets, (3) negotiate with the creditor, or (4) file bankruptcy.

Exempt property is any property that creditors cannot seize and sell in order to satisfy debt during chapter 7 or chapter 13 bankruptcy. The type of property exempted differs from state to state but often includes clothes, home furnishings, retirement plans, and small amounts of equity in a house and car.

Exempted Assets: Assets which are not considered as a part of wealth for the computation of wealth tax. Property held under trust/ for the purpose of charitable/religious purposes. Interest in coparcenary property of Hindu Undivided family. Jewellery in possession of ruler not being his personal property.

Code §34-55-10-2(c)(1), Indiana gives you a homestead exemption in the amount of $19,300 for your home or principal residence. This can be doubled for married filers. Any interest in real estate held as a tenant by the entirety also is exempt, unless both owners are bankrupt.

Debts Never Discharged in Bankruptcy

Alimony and child support. Certain unpaid taxes, such as tax liens. However, some federal, state, and local taxes may be eligible for discharge if they date back several years. Debts for willful and malicious injury to another person or property.

What can a creditor do if I can't pay? ›

An unsecured creditor is an individual or institution that lends money without obtaining specified assets as collateral. This poses a higher risk to the creditor because it will have nothing to fall back on should the borrower default on the loan.

Unsecured Creditors. An unsecured creditor is essentially an individual or institution that lends money without obtaining specified assets as collateral. Unsecured creditors are generally placed into two categories: priority unsecured creditors and general unsecured creditors.

A creditor or debt collector cannot freeze your bank account unless it has a judgment. Judgment creditors freeze people's bank accounts as a way of pressuring people to make payments.