Filing Chapter 7 Bankruptcy in Indiana (2026)
Reviewed by DocDraft Legal Team · Indiana · Last updated August 18, 2026
Chapter 7 bankruptcy is federal law, but the property you keep is set by Indiana. Indiana is an opt-out state: under Indiana Code 34-55-10-2 you must use Indiana's exemptions and cannot choose the federal 522(d) list. Indiana has no separate motor-vehicle exemption, so a car is protected through the tangible personal-property allowance. This page explains Indiana's $22,750 homestead exemption, the $12,100 tangible and $450 intangible personal-property figures, the means-test median income, and the two federal bankruptcy courts where Hoosiers file. Chapter 7 discharges most unsecured debt but not most student loans, recent taxes, or child and spousal support.
Does Indiana use state or federal bankruptcy exemptions?
Indiana is an opt-out state. Under Indiana Code 34-55-10-2, a debtor filing in Indiana must use Indiana's exemptions and cannot elect the federal 11 U.S.C. 522(d) list. Indiana's dollar figures are adjusted for inflation every six years by the Department of Financial Institutions under Indiana Code 34-55-10-2.5.
Can I keep my house if I file Chapter 7 in Indiana?
Often yes. Indiana's homestead exemption under Indiana Code 34-55-10-2(c)(1) protects up to $22,750 of equity in real or personal property you use as a residence. A married couple filing jointly can double this to $45,500. If your home equity fits within that amount, Chapter 7 generally lets you keep the house.
Can I keep my car if I file Chapter 7 in Indiana?
Indiana has no separate motor-vehicle exemption. A car is protected through the tangible personal-property allowance under Indiana Code 34-55-10-2(c)(2), which exempts up to $12,100 of equity in tangible property that is not your residence. If your car equity, combined with other tangible items, fits within that figure, the vehicle is protected.
What is the income limit to file Chapter 7 in Indiana?
For cases filed on or after July 15, 2026, the U.S. Trustee median income figures for Indiana are $64,461 for one earner, $81,986 for two, $95,627 for three, and $115,656 for four, adding $11,100 per additional person. At or below your household figure, you pass the first part of the means test.
Indiana's Opt-Out Rule, the $22,750 Homestead, and No Separate Car Exemption
Indiana is a bankruptcy opt-out state. Under Indiana Code 34-55-10-2, a debtor filing in Indiana must use Indiana's exemptions and cannot choose the federal 11 U.S.C. 522(d) set. Indiana's headline figures are a homestead exemption of $22,750 in real or personal property used as a residence (Ind. Code 34-55-10-2(c)(1)), a tangible personal-property allowance of $12,100 (Ind. Code 34-55-10-2(c)(2)), and an intangible personal-property allowance of $450 covering deposit accounts and cash (Ind. Code 34-55-10-2(c)(3)). What makes Indiana distinctive is that it has no separate motor-vehicle exemption: a car is protected only to the extent its equity fits within the $12,100 tangible allowance alongside other non-residential property. There is also no broad standalone wildcard beyond these category allowances. Married couples filing jointly can generally double each figure. These amounts are adjusted for inflation every six years under Indiana Code 34-55-10-2.5, with the next adjustment due no later than March 1, 2028. Hoosiers file in one of two federal bankruptcy courts: the U.S. Bankruptcy Court for the Northern District of Indiana or the Southern District of Indiana, based on where they have lived for most of the prior 180 days.
Relevant Laws
Indiana Homestead and Personal-Property Exemptions (Ind. Code 34-55-10-2)
Sets Indiana's exemption amounts: a $22,750 homestead in real or personal property used as a residence, a $12,100 tangible personal-property allowance (which covers a vehicle, since Indiana has no separate car exemption), and a $450 intangible allowance for cash and deposit accounts.
Indiana Opt-Out and Biennial Adjustment (Ind. Code 34-55-10-2.5)
Indiana has opted out of the federal 11 U.S.C. 522(d) exemptions, so debtors must use the Indiana set under 34-55-10-2. Section 34-55-10-2.5 requires the Department of Financial Institutions to adjust the exemption dollar amounts for inflation, with the next adjustment due no later than March 1, 2028.
Indiana Wage Garnishment Limit (Ind. Code 24-4.5-5-105)
Caps how much of a debtor's earnings a creditor can garnish at the lesser of 25 percent of weekly disposable earnings or the amount above 30 times the federal minimum wage, protecting the remaining wages. Indiana has no standalone motor-vehicle exemption, so a vehicle is claimed under the 34-55-10-2(c)(2) tangible allowance instead.
Federal Bankruptcy Code Exemptions and Means Test (11 U.S.C. 522, 707)
The federal law behind Chapter 7. Section 522(b)(2) lets a state opt out of the federal 522(d) exemptions, which Indiana has done, and section 707(b) sets the means test measured against state median income.
Regional Variances
Indiana Chapter 7 Exemption Table
Homestead
Ind. Code 34-55-10-2(c)(1): up to $22,750 of equity in real or personal property used as a residence. A married couple filing jointly can double this to $45,500. Adjusted for inflation every six years under Ind. Code 34-55-10-2.5.
Motor vehicle
Indiana has no separate motor-vehicle exemption. A car is protected only to the extent its equity fits within the $12,100 tangible personal-property allowance under Ind. Code 34-55-10-2(c)(2), shared with other non-residential tangible items.
Wildcard
Indiana has no broad standalone wildcard. The closest equivalents are the $12,100 tangible personal-property allowance (Ind. Code 34-55-10-2(c)(2)) and the $450 intangible allowance for cash and deposit accounts (Ind. Code 34-55-10-2(c)(3)), which can be applied to a range of property.
Personal property
Ind. Code 34-55-10-2(c)(2) exempts up to $12,100 of tangible property other than the residence, covering vehicles, furniture, and tools. Ind. Code 34-55-10-2(c)(3) exempts up to $450 of intangible personal property such as cash and deposit accounts, excluding debts and income owing.
Wages
Under Ind. Code 24-4.5-5-105, garnishment is capped at the lesser of 25 percent of weekly disposable earnings or the amount above 30 times the federal minimum wage. The remaining 75 percent of disposable earnings is protected from creditors.
Retirement
Ind. Code 34-55-10-2(c)(6) exempts a debtor's interest in retirement plans and accounts to the extent of contributions and earnings that are not subject to federal income tax, including tax-qualified plans and IRAs. ERISA-qualified plans are separately excluded from the bankruptcy estate under federal law.
Suggested Compliance Checklist
Confirm the current Indiana means-test median income
Before you file days after startingCheck your household size against the U.S. Trustee Indiana median income figures in effect on your filing date, since these update periodically. For cases filed on or after July 15, 2026 the figures are $64,461 for one, $81,986 for two, $95,627 for three, and $115,656 for four, adding $11,100 per additional person.
Complete the pre-filing credit counseling course
Within 180 days before filing days after startingTake an approved credit counseling course from a provider authorized for your Indiana district and keep the certificate. You must file it with your petition. Skipping this can get your case dismissed before your debts are addressed.
Value your assets against the Indiana exemptions
Before preparing your schedules days after startingValue your home, vehicle, and personal property so you can match assets to Indiana's figures: the $22,750 homestead, the $12,100 tangible allowance (which covers your car, since Indiana has no separate vehicle exemption), and the $450 intangible allowance. Confirm whether doubling applies for a joint filing.
Prepare and file your petition and schedules
Filing day days after startingFile your petition, schedules, and exemption claims in the correct court: the Northern District of Indiana or the Southern District of Indiana, based on where you have lived for most of the prior 180 days. Filing triggers the automatic stay that pauses collection and garnishment.
Attend the 341 meeting and finish the debtor education course
Before discharge days after startingAttend the 341 meeting of creditors and answer the trustee's questions under oath, then complete the required post-filing financial management course and file the certificate. Both are required before the court will grant your discharge. An attorney can help with contested exemptions.
| Task | Description | Document | Days after starting |
|---|---|---|---|
| Confirm the current Indiana means-test median income | Check your household size against the U.S. Trustee Indiana median income figures in effect on your filing date, since these update periodically. For cases filed on or after July 15, 2026 the figures are $64,461 for one, $81,986 for two, $95,627 for three, and $115,656 for four, adding $11,100 per additional person. | - | Before you file |
| Complete the pre-filing credit counseling course | Take an approved credit counseling course from a provider authorized for your Indiana district and keep the certificate. You must file it with your petition. Skipping this can get your case dismissed before your debts are addressed. | - | Within 180 days before filing |
| Value your assets against the Indiana exemptions | Value your home, vehicle, and personal property so you can match assets to Indiana's figures: the $22,750 homestead, the $12,100 tangible allowance (which covers your car, since Indiana has no separate vehicle exemption), and the $450 intangible allowance. Confirm whether doubling applies for a joint filing. | - | Before preparing your schedules |
| Prepare and file your petition and schedules | File your petition, schedules, and exemption claims in the correct court: the Northern District of Indiana or the Southern District of Indiana, based on where you have lived for most of the prior 180 days. Filing triggers the automatic stay that pauses collection and garnishment. | - | Filing day |
| Attend the 341 meeting and finish the debtor education course | Attend the 341 meeting of creditors and answer the trustee's questions under oath, then complete the required post-filing financial management course and file the certificate. Both are required before the court will grant your discharge. An attorney can help with contested exemptions. | - | Before discharge |
Frequently Asked Questions
Under Indiana Code 34-55-10-2(c)(1), the Indiana homestead exemption protects up to $22,750 of equity in real or personal property you use as a residence. A married couple filing jointly can double this to $45,500. The amount is adjusted for inflation every six years under Indiana Code 34-55-10-2.5, with the next adjustment due no later than March 1, 2028.
No. Indiana has no dedicated motor-vehicle exemption. A car is protected only through the tangible personal-property allowance under Indiana Code 34-55-10-2(c)(2), which exempts up to $12,100 of equity in non-residential tangible property. Your vehicle shares that allowance with furniture, tools, and other tangible items, so high car equity can reduce what else you protect.
No. Chapter 7 discharges most unsecured debt like credit cards and medical bills, but it does not erase most student loans, recent income taxes, child support, or spousal support, and it will not discharge debts from fraud. Secured debts like a car loan remain unless you surrender the collateral or reaffirm the loan.
You file in the federal bankruptcy court for your area: the U.S. Bankruptcy Court for the Northern District of Indiana or the Southern District of Indiana. The Southern District covers Indianapolis and the southern counties; the Northern District covers the Fort Wayne, South Bend, Gary, and Hammond areas. You file where you have lived for most of the prior 180 days.
Indiana wage protection follows the garnishment cap in Indiana Code 24-4.5-5-105. Creditors may reach the lesser of 25 percent of your weekly disposable earnings or the amount by which those earnings exceed 30 times the federal minimum wage. The remaining 75 percent of disposable earnings is protected, which helps preserve income you earn after filing.
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