Understanding the Nature of Exempt Property in a Bankruptcy
Bankruptcy laws are complex. One of the major concerns filers have is whether they will be able to keep property such as their home or car after bankruptcy. A bankruptcy attorney can sit down with you and review your situation to better prepare you for what to expect.
Understanding Common Bankruptcy Exemptions
Exemptions in bankruptcy law exist for certain types of property the debtor may own jointly or individually. If an exemption applies, this can mean that the debtor can shield it from the reach of the bankruptcy court to some extent. As your bankruptcy lawyer can counsel, this means you may not need to worry about being forced to sell the property in order to receive a discharge of your debts in bankruptcy. Exemptions exist in both federal and state bankruptcy law, but Indiana has opted out of the federal system. If you file for bankruptcy in Indiana, you must use the state mandated exemptions in your case.
Exemptions Relating to Your Home
Real estate may qualify for a bankruptcy exemption up to a certain value. The state exemption amount is $176,000 for a residential home. Thus, if your home is worth less than $176,000, the entire amount is exempt. Also, married couples filing jointly can each take the exemption amount thus doubling the exempt value that pertains to them.
Cars themselves aren’t exempt but Indiana allows for certain “wildcard” exemptions that may protect vehicles.
Life Insurance and Certain Other Benefits
Life insurance and other benefits payable to a beneficiary may be exempt for the insured. Unemployment benefits may be exempt until the reach the payee.