Anderson, Indiana Lawyer for Bankruptcy Answers Reader’s Question About Joint Exemptions

March 15, 2012 10:12 pm Published by

As the third Bankruptcy in Indiana reader question of the week, I was asked “What are the Indiana bankruptcy exemptions for a joint bankruptcy?”

That is actually an “educated” question, because not many people know that although the federal bankruptcy code provides a list of exemptions, and although in many states debtors have the choice of using their state law of these federal rules, in this state the law requires those filing personal bankruptcy in Indiana to use the exemptions found in Indiana state law. (As a longtime debt consolidation lawyer offering bankruptcy services in Indiana, I was privileged to have helped write that list of Indiana exemptions.) Beginning with the year 2010, by the way, our Indiana exemptions are set to be adjusted for inflation every six years. 

Going back to our reader’s question about filing a joint bankruptcy, I have several comments:

  • The exemptions apply to each debtor separately.  That means that when two people joint personal bankruptcy in Indiana, it’s generally true that the exemption amounts can be doubled.
     
  • Most good bankruptcy attorneys in Indiana will agree that, in actual practice, they find that almost all people facing bankruptcy own only the kind of property that is exempt.
     
  • As debtors filing personal bankruptcy in Indiana, if either one of you  separately – or if together – you own any asset that is worth more than the exemption amount (the equity you have in it),  the exemption will apply, but the bankruptcy trustee could still force the sale of that asset, giving creditors whatever amount of the proceeds exceeds the exemption.  In other words, exemptions protect only the equity you have, not the entire value of each asset.
     
  • The Homestead Exemption in Indiana is $17,800 (make that double if spouses are co-owners of the home. For other real estate owned, the Indiana exemption is $9,350, or $18,700 for jointly owned property. (This is called the Wild Card Exemption.) $350 is exempt for each of you for non-tangible property such as bank accounts or tax refunds.


One of the most pervasive myths about bankruptcy, claims one of the Columbus bankruptcy lawyers who works in the Zuckerberg bankruptcy law offices, is that if you’re married, you must both file bankruptcy.  I wanted to be sure and tell our reader that’s not necessarily true.  Certainly, in cases where husband and wife have a lot of debt, it could save money for them both to file, but they don’t have to do that.  Deciding whether to file jointly or not can be complicated, so it’s best to get good legal advice early on. Remember, you’ll want to take maximum advantage of those Indiana exemptions!

 

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This post was written by Mark Zuckerberg

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