There are many contributing factors that are associated with financial troubles. The most common reasons include overwhelming debt, sudden unemployment, divorce, foreclosure, or sudden illness.

In fact, the average credit card debt in Indiana is a whopping $4,878 per person. In addition, foreclosure rates are also as staggering, one out of every 1,769 IN homes is currently in foreclosure.

If you can relate to the scenarios above, then you are more than likely facing other personal problems that come with living in debt. The fear of losing your automobile, house or your income can drain a person physically and emotionally. You may have even considered Filing Chapter 7 or Chapter 13 Bankruptcy .

If you are thinking “Should I File Bankruptcy?” you are undoubtedly not alone. Around a million people file bankruptcy each year in the United States. Bankruptcy is a tool established by the US Government to help struggling Americans find relief from overwhelming debt. You may want to consider filing bankruptcy if it’s best for you.

What Is Bankruptcy?

Bankruptcy gives people the opportunity to lift their financial burden while still working with lenders in a legal capacity. It is initiated by an individual filing a Petition with their nearest bankruptcy court. The Petition can be filed by an individual or by spouses jointly. When the bankruptcy is over, the filer will ‘exit’ and will have a chance for a fresh start on their finances.

During a bankruptcy, a trustee is appointed to oversee the particulars of the matter. His or her responsibilities will vary and depend on whether the individual has filed for Chapter 7 or Chapter 13 bankruptcy.

Did you know that Indiana ranks #6 in the nation for bankruptcy filings. In 2017 the number of personal bankruptcies was approximately 450 out of every 100,000 residents.

What Is The Difference Between Chapter 7 And Chapter 13?

People in Indiana, who claim bankruptcy, can choose to file under Chapter 7 or Chapter 13 of the U.S. Bankruptcy Code. What is the difference? Look below for more information

Chapter 7

The trustee of the bankruptcy will liquidate the assets, such as cars, homes, and other property of value in a Chapter 7 Bankruptcy proceeding, In exchange for dissolving all past due debts.

The proceeds collected during liquidation will be used to repay debtors that were listed on the bankruptcy filing.

Chapter 13

If you have the means to pay some of your debts, a chapter 13 bankruptcy plan may work for you. The individual will be allowed to retain his or her valuable assets over a 3- to 5-year time frame.

In order to decide which chapter a person can file, he or she will have to determine their ability to repay under the Bankruptcy Means Test.

What Is A Bankruptcy Means Test?

The ultimate goal of the Bankruptcy Means Test is to determine who is eligible to apply for debt forgiveness through a Chapter 7 Bankruptcy. It takes into account your:

  • income and expenses
  • household size and composition
  • debt-to-income ratio

If you do not qualify for Chapter 7 bankruptcy, you will be able to file for Chapter 13, as above-described.

What Are Bankruptcy Exemptions?

Specific states have certain exclusions that are enacted by congress as federal bankruptcy exemptions for filers. These exemptions will determine what you are able to retain throughout and after Chapter 7. In a Chapter 13 situation, the exemptions will determine what amount you will have to pay certain financial institutions in your repayment plan.


  • Real or personal property used as a residence up to $19,300; equity in real estate held as tenants by the entirety might be fully exempt if only one spouse files (this does not apply when both owners file for bankruptcy).

Personal Property

  • Spendthrift trusts.
  • Health aids; funds in medical savings accounts and health savings accounts; up to $350 of intangible personal property (except for money owed to you)
  • Education savings account contributions made more than 2 years prior to filing; other conditions apply.


  • Either 75% of earned but unpaid wages or 30 times the federal minimum hourly wage, whichever is greater. A judge may approve more for low-income debtors.


  • Tax exempt retirement accounts (including 401(k)s, 403(b)s, profit-sharing and money purchase plans, SEP and SIMPLE IRAs, and defined benefit plans).
  • IRAS and Roth IRAs (limits apply).
  • Public employees.
  • Police officers.
  • State teachers.
  • Firefighters.

Public Benefits

  • Earned income tax credit.
  • Workers’ compensation.
  • Unemployment compensation.

Tools of Trade

  • National guard arms, uniforms, and equipment.


  • Life insurance policy or proceeds if the beneficiary is spouse or dependent.
  • Group life insurance policy.
  • Life insurance proceeds if policy prohibits use to pay creditors.
  • Mutual life or accident policy proceeds as needed for support.
  • Fraternal benefit society benefits.
  • Employer’s life insurance policy on an employee.


  • Specific business partnership property.


  • $10,250 of real estate or tangible personal property.

Want to know if you can include Student Loans in Bankruptcy or Medical Bills in Bankruptcy? Check out our Bankruptcy FAQ’s section.

Filing Bankruptcy Alone vs. Filing With An Attorney

Current bankruptcy laws do not require individuals to hire a lawyer to declare bankruptcy relief. People are permitted to represent him or herself as a pro se debtor. You will simply contact the local bankruptcy court and obtain all forms and requirements directly through them. Going it alone is not an easy task.

Filing Bankruptcy without an Attorney

A simple Chapter 7 filing that doesn’t have a lot of debtors or assets may be easy to manage on your own.

A basic bankruptcy that doesn’t involve an attorney might look like:.

  • Your income is below the state median;
  • You have no property;
  • Your debts will be considered dis-chargeable.

Working With An Attorney

Most of the time, it is usually in one’s best interest to work with a bankruptcy lawyer. A bankruptcy lawyer is there to represent you and not the creditors.

An attorney is also accustomed with exemption laws. Plus, they can come up with creative strategies to keep your assets through practical repayment strategies that are fair to everyone involved.

While you may have the fight and ability to manage a Bankruptcy on your own, it tends to make things a lot easier on an already stressful situation, especially when there is so much at stake.

What Does Bankruptcy Include?

Once you file for bankruptcy in IN, the courts put in place an order called an Automatic Stay. This order will stop debt collection calls, wage garnishments, and additional claims. Keep in mind that payments regarding child support and criminal cases will still need to be made during this time.

In any event, Bankruptcy will be able to include:

  • credit card debt
  • protection from eviction
  • avoidance of foreclosure
  • utility bills
  • medical expenses

Again, unless you are filing a complex Chapter 13 case, you will lose all assets associated with a Chapter 7 Bankruptcy protection. You will, however, be able to prevent any and all collections from occurring as long as they were incurred before the date of filing and discharge.

Final Thoughts And Considerations On Filing For Bankruptcy In Indiana

As you can see, there a lot of information associated with successfully filing for bankruptcy and then exiting it unscathed or satisfied. Only a licensed bankruptcy attorney can guide you through this arduous process, particularly when it comes to complex cases. Be sure to hire someone you respect and trust.

Bankruptcy Courts In Indiana

E. Ross Adair Federal Building and United States Courthouse
1300 South Harrison Street
Fort Wayne,IN 46802
Indiana Northern Bankruptcy Court

Robert K. Rodibaugh United States Courthouse
401 South Michigan Street
South Bend,IN 46601
Indiana Northern Bankruptcy Court

Charles A. Halleck Federal Building
230 North Fourth Street
Lafayette,IN 47901
Indiana Northern Bankruptcy Court

United States Courthouse
5400 Federal Plaza
Hammond,IN 46320
Indiana Northern Bankruptcy Court

Birch Bayh Federal Building and United States Courthouse
46 East Ohio Street
Indianapolis,IN 46204
Indiana Southern Bankruptcy Court

Lee H. Hamilton Federal Building and United States Courthouse
121 West Spring Street
New Albany,IN 47150
Indiana Southern Bankruptcy Court

Federal Building
101 NW Martin Luther King Jr. Boulevard
Evansville,IN 47708
Indiana Southern Bankruptcy Court


Additional Indiana Resources

Foreclosure Help Program

Disability SSDI Benefits