Asset Exemption Increases for Indiana Bankruptcy Filings

Last Updated on January 9, 2026

Current Indiana Bankruptcy Exemptions: How to Keep More of Your Property

These exemption amounts are scheduled to remain in effect until the next adjustment no later than March 1, 2028.​

Many people delay filing bankruptcy because they fear losing their home, car, or basic household property. Indiana law protects specific categories of property, called exemptions, so you can keep essential assets while you eliminate qualifying debt.​

Our experienced Terre Haute bankruptcy attorneys help clients understand what they can protect and how to use these exemptions effectively in Chapter 7 and Chapter 13 cases.​

Chapter 7 Bankruptcy Basics

Chapter 7 is a liquidation process that wipes out most unsecured debts, such as credit cards, medical bills, personal loans, and many collection accounts. In many cases, filers keep all or most of their property because it falls within Indiana’s exemption limits.​

To qualify for Chapter 7, you must:

• Not have received a Chapter 7 discharge in the past eight years​

• Pass the “means test,” which compares your household income to Indiana’s median and accounts for allowed expenses​

If you are current on your mortgage or car payments and your equity is fully covered by exemptions, you can usually keep those assets and continue paying on the loans.​

Indiana Is a State-Only (Opt-Out) Exemption System

Indiana is an opt‑out state, which means most long‑term residents must use Indiana’s state exemptions and cannot choose the federal bankruptcy exemption system. If you have not lived in Indiana for at least two years before filing, special residency rules determine which state’s exemptions apply, but you still cannot select the federal system instead of the applicable state scheme.​

Because you cannot mix and match federal exemptions in place of Indiana’s, careful planning with an attorney is important to maximize the protection available under state law.​

Main Indiana Bankruptcy Exemptions (Effective Through Early 2028)

Indiana exemption law protects three key categories of property: your residence, other real or tangible property, and intangible personal property. The Indiana Department of Financial Institutions adjusted these limits effective March 1, 2022, and they remain current for 2026.​

Individual Exemption Amounts

For an individual filer, the current exemption amounts are:

• Homestead (personal or family residence): Up to $22,750 in equity in real estate or tangible personal property used as your personal or family residence​

• Other real estate or tangible personal property: Up to $12,100 in any non‑residential real estate or tangible property (often used as a general “wildcard” for vehicles, tools, and household goods)​

• Intangible personal property: Up to $450 in intangible property such as funds in a bank account, certain receivables, unreceived tax refunds, inheritances, and similar interests​

“Equity” means the value of the property minus any debt secured by that property, such as a mortgage or car loan.​

Married Couples Filing Jointly

When a married couple files jointly, each spouse can claim a full set of exemptions unless a statute says otherwise. For most cases, this effectively doubles the available protection to:​

• Homestead (joint): Up to $45,500 in equity in a qualifying personal or family residence​

• Other real estate or tangible personal property (joint): Up to $24,200 in non‑residential real estate or tangible property​

• Intangible personal property (joint): Up to $900 in qualifying intangible property​

Because exemption planning can be nuanced for couples, especially where only one spouse is filing, legal advice is critical before transferring or retitling assets.​

Tenancy by the Entireties and Other Important Protections

Indiana law offers additional significant protections not fully captured by the dollar limits above.​

Tenancy by the Entireties for Married Couples

Property owned by spouses as tenants by the entireties may be fully protected from creditors of only one spouse, as long as the debt is not joint. In practical terms:​

• If only one spouse files bankruptcy and most debts are in that spouse’s name alone, entireties property may be shielded from those creditors​

• This protection is separate from and in addition to the standard homestead exemption in some situations​

Whether your home is held as tenants by the entireties and how that affects your case is a fact‑specific issue that should be reviewed with an attorney.​

Other Commonly Protected Assets

Beyond the three core categories, several other types of property receive strong protection under Indiana and federal law:​

• Most tax‑qualified retirement accounts (401(k), 403(b), traditional and Roth IRAs, pensions) up to the federal cap for IRAs and fully for many employer plans​

• Health savings accounts and many medical savings accounts​

• Prescribed health aids for you or your dependents​

• Workers’ compensation and unemployment compensation benefits​

• Certain public benefits and crime victim compensation​

A complete exemption review should cover every category of property you own so that no asset is overlooked.​

How Our Terre Haute Bankruptcy Attorneys Can Help

Choosing when and how to file bankruptcy is as important as deciding whether to file at all. Proper use of Indiana’s exemptions can allow you to eliminate unsecured debts while keeping your home, vehicles, retirement funds, and essential household property.​

At Rowdy G. Williams Law Firm, our Terre Haute bankruptcy team:

• Evaluates your income, debts, and assets to determine eligibility for Chapter 7 or Chapter 13

• Reviews titles, equity, and tenancy by the entireties issues for married clients

• Identifies every available exemption and plans your case to protect as much property as the law allows​

If you are facing creditor lawsuits, garnishments, or overwhelming debt, contact our office at 812‑232‑7400 for a free bankruptcy consultation. Our attorneys will explain your options, discuss what you can keep, and help you decide the best path forward for a fresh financial start.