Many different states have different statutes that govern how bankruptcies are performed. These statutes can differ greatly from one state to the next, so it is important to know what the law in your own state is regarding bankruptcy. One state that has very specific laws that are not shared by other states is Indiana.
During a Chapter 7 bankruptcy proceeding, a trustee will be appointed by the court. The trustee’s job will be to take legal ownership of certain kinds of property of the debtor and forms of income the debtor receives for the purpose of paying back creditors that are owed money by the debtor.
Fortunately, there is a way for debtors to protect their property. By declaring exemptions to bankruptcy liquidation, a debtor can actually keep certain kinds of income and prevent certain kinds of property from being repossessed and sold to pay back creditors. However, these exemptions must follow very specific guidelines. Indiana is one state that has created a list of standards for what can be considered exempt from liquidation.
One category of income that is generally exempt from being acquired by a trustee during a bankruptcy proceeding in Indiana is insurance benefits. This class of exemptions includes regular life insurance, group life insurance, mutual insurance, and insurance benefits from a fraternal benefit society.
Pensions are another kind of income that may also be completely protected. The kinds of pensions protected under Indiana bankruptcy law are usually those of workers who perform a service beneficial to the community. Pensions that will be protected include benefits paid to firefighters, government employees, police officers, and teachers. Certain other kinds of private and public retirement benefits are likely to be protected as well.
Benefits received as some kind of public welfare may also be protected under Indiana bankruptcy law. This kind of protected public income can include benefits paid to the unemployed as well as workers’ compensation payments. Income that is received by victims as compensation from a criminal will also almost always be protected.
However, Indiana exemptions are not only limited to those put in place by Indiana state legislators. It is also possible for exemptions chosen using Indiana law to be supplemented by certain federal exemptions as well. For example, someone living in Indiana could also choose to exempt deposits made in a US bank account by a military service man or woman while he or she was outside of the country on duty. Many other kinds of retirement benefits can also be protected under these federal laws including retirement benefits paid to CIA employees, civil service employees, railroad workers, and veterans.
Due to the complexity of the bankruptcy code both in Indiana and at the federal level, it is always important to consult a lawyer very experienced in bankruptcy law if you intend to file.
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If you live in Alabama, Florida, Missouri, New York or Wyoming, please click here for additional information.
By an Act of Congress and the President of the United States, we are a federal Debt Relief Agency. Attorneys and/or law firms promoted through this Web site are also federally designated Debt Relief Agencies. They help people file for relief under the U.S. Bankruptcy Code. Disclosures Required Under the U.S. Bankruptcy Code.