Indiana State Bankruptcy Exemptions
§ 34-55-10-2. Amount of exemption
(a) This section does not apply to judgments obtained before October 1, 1977.
(b) The amount of each exemption under subsection (c) applies until a rule is
adopted by the department of financial institutions under section 2.5 [IC
34-55-10-2.5] of this chapter.
(c) The following property of a debtor domiciled in Indiana is exempt:
(1) Real estate or personal property constituting the personal or family
residence of the debtor or a dependent of the debtor, or estates or rights in
that real estate or personal property, of not more than fifteen thousand
dollars ($ 15,000). The exemption under this subdivision is individually
available to joint debtors concerning property held by them as tenants by the
entireties.
(2) Other real estate or tangible personal property of eight thousand dollars
($ 8,000).
(3) Intangible personal property, including choses in action, deposit accounts,
and cash (but excluding debts owing and income owing), of three hundred dollars
($ 300).
(4) Professionally prescribed health aids for the debtor or a dependent of the
debtor.
(5) Any interest that the debtor has in real estate held as a tenant by the
entireties. The exemption under this subdivision does not apply to a debt for
which the debtor and the debtor's spouse are jointly liable.
(6) An interest, whether vested or not, that the debtor has in a retirement
plan or fund to the extent of:
(A) contributions, or portions of contributions, that were made to the
retirement plan or fund by or on behalf of the debtor or the debtor's spouse:
(i) which were not subject to federal income taxation to the debtor at the time
of the contribution; or
(ii) which are made to an individual retirement account in the manner
prescribed by Section 408A of the Internal Revenue Code of 1986;
(B) earnings on contributions made under clause (A) that are not subject to
federal income taxation at the time of the levy; and
(C) roll-overs of contributions made under clause (A) that are not subject to
federal income taxation at the time of the levy.
(7) Money that is in a medical care savings account established under IC
6-8-11.
(8) Any interest the debtor has in a qualified tuition program, as defined in
Section 529(b) of the Internal Revenue Code of 1986, but only to the extent
funds in the program are not attributable to:
(A) excess contributions, as described in Section 529(b)(6) of the Internal
Revenue Code of 1986, and earnings on the excess contributions;
(B) contributions made by the debtor within one (1) year before the date of the
levy or the date a bankruptcy petition is filed by or against the debtor, and
earnings on the contributions; or
(C) the excess over five thousand dollars ($ 5,000) of aggregate contributions
made by the debtor for all programs under this subdivision and education
savings accounts under subdivision (9) having the same designated beneficiary:
(i) not later than one (1) year before; and
(ii) not earlier than two (2) years before;
the date of the levy or the date a bankruptcy petition is filed by or against
the debtor, and earnings on the aggregate contributions.
(9) Any interest the debtor has in an education savings account, as defined in
Section 530(b) of the Internal Revenue Code of 1986, but only to the extent
funds in the account are not attributable to:
(A) excess contributions, as described in Section 4973(e) of the Internal
Revenue Code of 1986, and earnings on the excess contributions;
(B) contributions made by the debtor within one (1) year before the date of the
levy or the date a bankruptcy petition is filed by or against the debtor, and
earnings on the contributions; or
(C) the excess over five thousand dollars ($ 5,000) of aggregate contributions
made by the debtor for all accounts under this subdivision and qualified
tuition programs under subdivision (8) having the same designated beneficiary:
(i) not later than one (1) year before; and
(ii) not earlier than two (2) years before;
the date of the levy or the date a bankruptcy petition is filed by or against
the debtor, and earnings on the excess contributions.
(10) The debtor's interest in a refund or a credit received or to be received
under section 32 of the Internal Revenue Code of 1986.
(d) A bankruptcy proceeding that results in the ownership by the bankruptcy
estate of a debtor's interest in property held in a tenancy by the entireties
does not result in a severance of the tenancy by the entireties.
(e) Real estate or personal property upon which a debtor has voluntarily granted
a lien is not, to the extent of the balance due on the debt secured by the
lien:
(1) subject to this chapter; or
(2) exempt from levy or sale on execution or any other final process from a
court.
§ 24-4.5-5-105. Limitation on garnishment and support withholding -- Fee to
compensate employer for making deductions -- Priority of support withholding
order
(1) For the purposes of IC 24-4.5-5-101 through IC 24-4.5-5-108:
(a) "Disposable earnings" means that part of the earnings of an individual,
including wages, commissions, income, rents, or profits remaining after the
deduction from those earnings of amounts required by law to be withheld;
(b) "Garnishment" means any legal or equitable proceedings through which the
earnings of an individual are required to be withheld by a garnishee, by the
individual debtor, or by any other person for the payment of a judgment; and
(c) "Support withholding" means that part of the earnings that are withheld
from an individual for child support in accordance with the laws of this state.
(2) Except as provided in subsection (8), the maximum part of the aggregate
disposable earnings of an individual for any workweek which is subjected to
garnishment to enforce the payment of one (1) or more judgments against him may
not exceed:
(a) Twenty-five percent (25%) of his disposable earnings for that week; or
(b) The amount by which his disposable earnings for that week exceed thirty
(30) times the federal minimum hourly wage prescribed by 29 U.S.C. 206(a)(1) in
effect at the time the earnings are payable;
whichever is less. In the case of earnings for a pay period other than a week,
the earnings shall be computed upon a multiple of the federal minimum hourly
wage equivalent to thirty (30) times the federal minimum hourly wage as
prescribed in this section.
(3) The maximum part of the aggregate disposable earnings of an individual for
any workweek which is subject to garnishment or support withholding to enforce
any order for the support of any person shall not exceed:
(a) Where such individual is supporting his spouse or dependent child (other
than a spouse or child with respect to whose support such order is used), fifty
percent (50%) of such individual's disposable earnings for that week; and
(b) Where such individual is not supporting such a spouse or dependent child
described in subdivision (a), sixty percent (60%) of such individual's
disposable earnings for that week;
except that, with respect to the disposable earnings of any individual for any
workweek, the fifty percent (50%) specified in subdivision (a) shall be deemed
to be fifty-five percent (55%) and the sixty percent (60%) specified in
subdivision (b) shall be deemed to be sixty-five percent (65%), if and to the
extent that such earnings are subject to garnishment or support withholding to
enforce a support order with respect to a period which is prior to the twelve
(12) week period which ends with the beginning of such workweek.
(4) No court may make, execute, or enforce an order or process in violation of
this section.
(5) An employer who is required to make deductions from an individual's
disposable earnings pursuant to a garnishment order or series of orders arising
out of the same judgment debt (excluding a judgment for payment of child
support) may collect, as a fee to compensate the employer for making these
deductions, an amount equal to the greater of twelve dollars ($ 12) or three
percent (3%) of the total amount required to be deducted by the garnishment
order or series of orders arising out of the same judgment debt. If the
employer chooses to impose a fee, the fee shall be allocated as follows:
(a) One-half (1/2) of the fee shall be borne by the debtor, and that amount may
be deducted by the employer directly from the employee's disposable earnings.
(b) One-half (1/2) of the fee shall be borne by the creditor, and that amount
may be retained by the employer from the amount otherwise due the creditor.
The deductions made under this subsection for a collection fee do not increase
the amount of the judgment debt for which the fee is collected for the purpose
of calculating or collecting judgment interest. This fee may be collected by an
employer only once for each garnishment order or series of orders arising out
of the same judgment debt. The employer may collect the entire fee from one (1)
or more of the initial deductions from the employee's disposable earnings.
Alternatively, the employer may collect the fee ratably over the number of pay
periods during which deductions from the employee's disposable earnings are
required.
(6) The deduction of the garnishment collection fee under subsection (5)(a) or
subsection (7) is not an assignment of wages under IC 22-2-6.
(7) An employer who is required to make a deduction from an individual's
disposable earnings in accordance with a judgment for payment of child support
may collect a fee of two dollars ($ 2) each time the employer is required to
make the deduction. The fee may be deducted by the employer from the
individual's disposable earnings each time the employer makes the deduction for
support. If the employer elects to deduct such a fee, the amount to be deducted
for the payment of support must be reduced accordingly if necessary to avoid
exceeding the maximum amount permitted to be deducted under subsection (3).
(8) A support withholding order takes priority over a garnishment order
irrespective of their dates of entry or activation. If a person is subject to a
support withholding order and a garnishment order, the garnishment order shall
be honored only to the extent that disposable earnings withheld under the
support withholding order do not exceed the maximum amount subject to
garnishment as computed under subsection (2).
§ 5-2-6.1-38. Execution, attachment, garnishment or creditor's claim
An award made by the division to a claimant is not subject to execution,
attachment, garnishment, or other process, except the claim of a creditor to
the extent that the costs were included in the award.
§ 27-8-3-23. Benefits exempt from attachment or garnishee process--Premiums not
exempt--Insurer discharge from liability
(a) As used in this section, "premium" includes any deposit or contribution.
(b) The money or benefit provided or rendered by any corporation, association,
or society authorized to do business under this chapter shall not be liable to
attachment by garnishee or other process, and shall not be seized, taken,
appropriated, or applied by any legal or equitable process, nor by any
operation of law, to pay any debt or liability of a policy or certificate
holder or any beneficiary named therein.
(c) A premium paid for an individual life insurance policy that names as a
beneficiary, or is legally assigned to, a spouse, child, or relative who is
dependent upon the policy owner is not exempt from the claims of the creditors
of the policy owner if the premium is paid:
(1) Not more than one (1) year before the date of the filing of a voluntary or
involuntary bankruptcy petition by; or
(2) To defraud the creditors of;
the policy owner.
(d) The insurer issuing the policy is discharged from all liability by payment
of the proceeds and avails of the policy (as defined in IC 27-1-12-14(b)) in
accordance with the terms of the policy unless, before payment, the insurer has
received at the insurer's home office, written notice by or on behalf of a
creditor of the policy owner that specifies the amount claimed against the
policy owner.
§ 21-6.1-5-17. Benefits exempted from legal process -- Assignment of benefits
(a) The benefits payable from the fund are exempt from seizure or levy on
attachment, supplemental process, and all other processes.
(b) A member may not transfer any benefit payment; such a transfer is void.
However, a member may assign benefits for paying:
(1) Premiums on a group, life, hospitalization, surgical or medical insurance
plan maintained in whole or in part by a state agency; and
(2) Dues to any association which proves to the board's satisfaction that the
association has as members at least twenty percent (20%) of the number of
retired members of the fund.
§ 36-8-10-19. Limitations on transfers and liabilities
A person entitled to [an] interest in or share of a pension or benefit from the
trust funds may not, before the actual payment, anticipate it or sell, assign,
pledge, mortgage, or otherwise dispose of or encumber it. In addition, the
interest, share, pension, or benefit is not, before the actual payment, liable
for the debts or liabilities of the person entitled to it, nor is it subject to
attachment, garnishment, execution, levy, or sale on judicial proceedings, or
transferable, voluntarily or involuntarily. The trustee may expend the sums
from the fund that it considers proper for necessary expenses.
§ 36-8-7.5-19. Pension exempt from levy
All pensions, annuities, and benefits payable out of the 1953 fund are exempt
from seizure or levy upon attachment, garnishment, execution, and all other
process. Except as provided in section 23 [IC 36-8-7.5-23] of this chapter,
pensions, annuities, and benefits are not subject to sale, assignment, or
transfer by a beneficiary.
§ 36-8-6-14. Payment when funds insufficient to pay all claims in full -- Manner
of payment -- Exemption from seizure or levy -- Nonassignability by beneficiary
(a) If there is not sufficient money to the credit of the 1925 fund to pay all
claims against it in full, claims arising from the death of members of the
department shall be paid in full first with as little delay as possible, after
which an equal percentage shall be paid upon all other claims to the full
extent of the money on hand, until the fund is replenished.
(b) All pensions shall be paid by the treasurer of the local board at his office
at the same time and in the same installments as the members of the police
department are paid.
(c) All pensions payable out of the 1925 fund are exempt from seizure or levy
upon attachment, execution, supplemental process, and all other process,
whether mesne or final. Except as provided in section 21 [IC 36-8-6-21] of this
chapter, pensions are not subject to sale, assignment, or transfer by a
beneficiary.
§ 27-11-6-3. Exemption from attachment, garnishment or other process
No money or other benefit, charity, relief, or aid to be paid, provided, or
rendered by any society shall be liable to attachment, garnishment, or other
process or to be seized, taken, appropriated, or applied by any legal or
equitable process or operation of law to pay any debt or liability of a member,
beneficiary, or any other person who may have a right thereunder, either before
or after payment by the society.
§ 27-1-12-29. Group policies -- Exemption from liability for debts -- Premiums
not exempt -- Insurer discharge from liability
(a) As used in this section, "premium" includes any deposit or contribution.
(b) Except as provided in subsection (c), no policy of group insurance nor the
proceeds thereof, when paid to any employee or employees, shall be liable to
attachment, garnishment, or other process, or to be seized, taken,
appropriated, or applied to any legal or equitable process or operation of law,
to pay any debt or liability of such employee, or his beneficiary, or any other
person who may have a right thereunder, either before or after payment, nor
shall the proceeds thereof, where not payable to a named beneficiary,
constitute a part of the estate of the employee for the payment of his debts.
(c) A premium paid for an individual life insurance policy that names as a
beneficiary, or is legally assigned to, a spouse, child, or relative who is
dependent upon the policy owner is not exempt from the claims of the creditors
of the policy owner if the premium is paid:
(1) Not more than one (1) year before the date of the filing of a voluntary or
involuntary bankruptcy petition by; or
(2) To defraud the creditors of;
the policy owner.
(d) The insurer issuing the policy is discharged from all liability by payment
of the proceeds and avails of the policy (as defined in section 14(b) [IC
27-1-12-14(b)] of this chapter) in accordance with the terms of the policy
unless, before payment, the insurer has received at the insurer's home office,
written notice by or on behalf of a creditor of the policy owner that specifies
the amount claimed against the policy owner.
§ 5-10.3-8-9. Benefits exempted from legal process -- Reimbursement of employers
(a) All benefits, refunds of contributions, and money in the fund are exempt
from levy, sale, garnishment, attachment, or other legal process. However, the
member's contributions or benefits, or both, may be transferred to reimburse
his employer for loss resulting from the member's criminal taking of his
employer's property by the board if it receives adequate proof of the loss. The
loss resulting from the member's criminal taking of his employer's property
must be proven by a felony or misdemeanor conviction.
(b) The board may withhold payment of a member's contributions and interest if
the employer of the member notifies the board that felony or misdemeanor
charges accusing the member of the criminal taking of the employer's property
have been filed.
(c) The board may withhold payment of a member's contributions and interest
under subsection (b) until the final resolution of the criminal charges.
§ 36-8-7-22. Fund and benefits exempt from levy and seizure and not assignable
The 1937 fund may not be, either before or after an order for distribution to
members of the fire department or to the surviving spouses or guardians of a
child or children of a deceased, disabled, or retired member, held, seized,
taken, subjected to, detained, or levied on by virtue of an attachment,
execution, judgment, writ, interlocutory or other order, decree, or process, or
proceedings of any nature issued out of or by a court in any state for the
payment or satisfaction, in whole or in part, of a debt, damages, demand,
claim, judgment, fine, or amercement of the member or the member's surviving
spouse or children. The 1937 fund shall be kept and distributed only for the
purpose of pensioning the persons named in this chapter. The local board may,
however, annually expend an amount from the 1937 fund that it considers proper
for the necessary expenses connected with the fund. Notwithstanding any other
law, neither the fiscal body, the county board of tax adjustment, nor the
department of local government finance may reduce these expenditures.
§ 22-3-2-17. Claims not assignable -- Exempt from creditors' claims -- Exception
for child support income withholding
(a) Except as provided in subsection (b), no claims for compensation under IC
22-3-2 through IC 22-3-6 shall be assignable, and all compensation and claims
therefor shall be exempt from all claims of creditors.
(b) Compensation awards under IC 22-3-2 through IC 22-3-6 are subject to child
support income withholding under IC 31-16-15 and other remedies available for
the enforcement of a child support order. The maximum amount that may be
withheld under this subsection is one-half ( 1/2) of the compensation award.
§ 23-4-1-25. Nature of a partner's right in specific partnership property
(1) A partner is co-owner with his partners of specific partnership property
holding as a tenant in partnership.
(2) The incidents of this tenancy are such that:
(a) A partner, subject to the provisions of this chapter and to any agreement
between the partners, has an equal right with his partners to possess specific
partnership property for partnership purposes; but he has no right to possess
such property for any other purpose without the consent of his partners.
(b) A partner's right in specific partnership property is not assignable except
in connection with the assignment of rights of all the partners in the same
property.
(c) A partner's right in specific partnership property is not subject to
attachment or execution, except on a claim against the partnership. When
partnership property is attached for a partnership debt, the partners, or any
of them, or the representatives of a deceased partner, cannot claim any right
under the homestead or exemption laws.
(d) On the death of a partner, his right in specific partnership property vests
in the surviving partner or partners, except where the deceased was the last
surviving partner, when his right in such property vests in his legal
representative. Such surviving partner or partners, or the legal representative
of the last surviving partner, has no right to possess the partnership property
for any but a partnership purpose.
(e) A partner's right in specific partnership property is not subject to
allowances to surviving spouses, heirs, or next of kin.
§ 27-1-12-14. Beneficiaries under life insurance policies
(a) As used in this section, "premium" includes any deposit or contribution.
(b) As used in this section, "proceeds or avails" means death benefits, cash
surrender and loan values, premiums waived, and dividends whether used in
reduction of the premiums or in whatsoever manner used or applied, excepting
only where the debtor has, subsequent to the issuance of the policy, actually
elected to receive the dividends in cash.
(c) Any person whose life is insured by any life insurance company may name as
his payee or beneficiary any person or persons, natural or artificial, with or
without an insurable interest, or his estate. A designation at the option of
the policyowner may be made either revocable or irrevocable, and the option
elected shall be set out in and shall be made a part of the application for the
certificate or policy of insurance. When the right of revocation has been
reserved, the person whose life is insured, subject to any existing assignment
of the policy, may at any time designate a new payee or beneficiary, with or
without reserving the right of revocation, by filing written notice thereof at
the home office of the corporation, accompanied by the policy for suitable
indorsement thereon.
(d) Any person may effect an insurance on his life, for any definite period of
time, or for the term of his natural life, to inure to the sole benefit of the
spouse and children, or of either, or other relative or relatives dependent
upon such person or any creditor or creditors as he may cause to be appointed
and provided in the policy.
(e) Except as provided in subsection (g), all policies of life insurance upon
the life of any person, which name as beneficiary, or are bona fide assigned
to, the spouse, children, or any relative dependent upon such person, or any
creditor, shall be held, subject to change of beneficiary from time to time, if
desired, for the benefit of such spouse, children, other relative or creditor,
free and clear from all claims of the creditors of such insured person or of
the person's spouse; and the proceeds or avails of all such life insurance
shall be exempt from all liabilities from any debt or debts of such insured
person or of the person's spouse.
(f) A premium paid for an individual life insurance policy that names as a
beneficiary, or is legally assigned to, a spouse, child, or relative who is
dependent upon the policy owner is not exempt from the claims of the creditors
of the policy owner if the premium is paid:
(1) not more than one (1) year before the date of the filing of a voluntary or
involuntary bankruptcy petition by; or
(2) to defraud the creditors of;
the policy owner.
(g) The insurer issuing the policy is discharged from all liability by payment
of the proceeds and avails of the policy in accordance with the terms of the
policy unless, before payment, the insurer has received at the insurer's home
office, written notice by or on behalf of a creditor of the policy owner that
specifies the amount claimed against the policy owner.
Note: Exemptions may have changed since our last update. For the latest updates on these property exemptions, speak to a local bankruptcy lawyer.
» Back to Bankruptcy Laws In Your State