About Bankruptcy Law in Indiana, United States
Bankruptcy is a legal process that helps individuals and businesses in Indiana who are unable to pay their debts get a fresh financial start. This is typically achieved by liquidating assets to pay creditors or by creating a repayment plan. Bankruptcy laws in Indiana are governed by federal law, primarily the United States Bankruptcy Code, but state-specific rules also play an important role, especially regarding exemptions that determine what property you can keep. Filing for bankruptcy in Indiana provides legal protection against creditors and can stop collection activities, foreclosures, garnishments, and lawsuits.
Why You May Need a Lawyer
Bankruptcy is a complex legal process that involves careful documentation, eligibility determinations, and strict adherence to rules and deadlines. Here are common situations in which consulting a bankruptcy attorney is recommended:
- Facing foreclosure or repossession - If you risk losing your home or car.
- Harassment from creditors - If you receive persistent collection calls or are being sued by creditors.
- Overwhelming debt - When monthly payments seem impossible to meet.
- Complicated assets or income - If you own substantial property, run a business, or have irregular income.
- Recent job loss or medical issues - If a sudden income drop or large bills make debt repayment unfeasible.
- Uncertain which bankruptcy chapter to file - Understanding the difference between Chapter 7, Chapter 13, and other options can be confusing.
Bankruptcy lawyers guide you through the process, help protect your rights, maximize possible exemptions, and help avoid errors that could result in your case being dismissed.
Local Laws Overview
While bankruptcy is primarily governed by federal laws, Indiana has unique rules you must consider:
- Exemptions - Indiana has its own set of bankruptcy exemptions instead of those provided by federal law. Exemptions determine what property you get to keep, such as a portion of your home’s value, personal property, and some retirement accounts.
- Filing Districts - Indiana is divided into two federal bankruptcy districts: Northern and Southern. Where you file depends on your county of residence.
- Income Means Test - To qualify for Chapter 7 bankruptcy, you must pass a means test based on your monthly income and household size compared to Indiana’s median income levels.
- Mandatory Credit Counseling - Before filing, Indiana residents must complete an approved credit counseling course. A second debtor education course is required before discharge.
- State Law Protections - Certain debts, like child support, student loans, and recent taxes, are often non-dischargeable under both state and federal law.
Frequently Asked Questions
What types of bankruptcy are available in Indiana?
The two most common types for individuals are Chapter 7 (liquidation) and Chapter 13 (reorganization). Chapter 11 is typically used for businesses.
Will I lose my house or car if I file for bankruptcy in Indiana?
Indiana law allows exemptions for a portion of your home and vehicle’s value. Whether you keep them depends on your equity and the chapter under which you file.
How does the means test work in Indiana?
The means test compares your income to the median for Indiana households of similar size. If your income is below the median, you may qualify for Chapter 7. If it is higher, you might need to file Chapter 13.
Can all my debts be wiped out in bankruptcy?
No. Certain debts such as child support, alimony, most student loans, and recent taxes usually cannot be discharged.
How long does bankruptcy stay on my credit report in Indiana?
A Chapter 7 bankruptcy will typically appear for ten years, while a Chapter 13 will be reported for seven years from the date of filing.
Do I need to go to court if I file for bankruptcy?
Most filers must attend a meeting of creditors, called a 341 meeting, rather than a formal court hearing. In some cases, additional court appearances may be necessary.
Can I file bankruptcy without a lawyer in Indiana?
It is possible, but not advised. Bankruptcy law is complex and mistakes can result in your case being dismissed or losing valuable property.
What property is exempt in Indiana bankruptcy?
Indiana law allows a homestead exemption, personal property exemptions, certain retirement accounts, and more. The exact amounts are governed by state statutes and change periodically.
How much does it cost to file for bankruptcy in Indiana?
There are court filing fees (typically around 300 to 350 dollars) plus any fees charged by your attorney. Fee waivers may be available in limited circumstances.
How often can I file for bankruptcy in Indiana?
There are time limits between bankruptcy filings, which vary depending on the type of bankruptcy you previously filed and the type you are now filing.
Additional Resources
If you are considering bankruptcy in Indiana, these resources may be helpful:
- United States Bankruptcy Court - Northern and Southern Districts of Indiana
- Indiana Legal Services - Provides legal help to eligible low-income residents
- Indiana Bar Association - Offers lawyer referral services
- National Foundation for Credit Counseling - For pre-bankruptcy credit counseling
- Indiana Attorney General’s Office - Information about consumer rights and debt issues
Next Steps
If you are facing overwhelming debt in Indiana and are unsure about bankruptcy, consider the following steps:
- Gather your financial documents including debts, income statements, and asset lists.
- Complete a credit counseling session from an approved provider.
- Consult with a bankruptcy attorney in Indiana to discuss your options and identify the right chapter for your circumstances.
- Prepare and file your bankruptcy petition with the appropriate district court.
- Attend the required meetings and complete debtor education classes as required by law.
Taking these steps with the guidance of an experienced attorney can improve your chances of a successful bankruptcy outcome and help you move toward financial stability.
Lawzana helps you find the best lawyers and law firms in Indiana through a curated and pre-screened list of qualified legal professionals. Our platform offers rankings and detailed profiles of attorneys and law firms, allowing you to compare based on practice areas, including Bankruptcy, experience, and client feedback.
Each profile includes a description of the firm's areas of practice, client reviews, team members and partners, year of establishment, spoken languages, office locations, contact information, social media presence, and any published articles or resources. Most firms on our platform speak English and are experienced in both local and international legal matters.
Get a quote from top-rated law firms in Indiana, United States - quickly, securely, and without unnecessary hassle.
Disclaimer:
The information provided on this page is for general informational purposes only and does not constitute legal advice. While we strive to ensure the accuracy and relevance of the content, legal information may change over time, and interpretations of the law can vary. You should always consult with a qualified legal professional for advice specific to your situation.
We disclaim all liability for actions taken or not taken based on the content of this page. If you believe any information is incorrect or outdated, please
contact us, and we will review and update it where appropriate.
