Many – perhaps most – people in Indiana have some level of debt. In many cases, having certain types of debt is a good thing, but it can easily turn into a nightmare. When debt begins to pile up, a sudden change circumstances – the loss of a job, an injury or an illness, or other setback — can cause debt to become overwhelming. People in that situation may never see a way for them to rid themselves of the debt.
There are options available for people in this position. One of these options is bankruptcy.
This is something people generally want to turn to only as a last resort. They may fear the long-term effects that a bankruptcy may have on their financial future. They may also fear losing all of their property to liquidation in order to pay off the debts that they are able to pay off through liquidation.
Types of exempt property in bankruptcy
People who fear this should understand that many types of property are exempt during a bankruptcy proceeding. This means that people will be able to keep them during and after the bankruptcy. According to Indiana statutes, the property that is exempt includes, but is not limited to:
- Real estate that is the primary residence of the debtor
- Other real estate or tangible property up to $8,000 in value
- Interest in funds in retirement plans that were pre-tax contributions to the plans and contributions to IRAs in certain situations
- Earnings made on the pre-tax contributions to retirement plans and roll-overs of contributions as well
- Money in a medical care savings or health savings accounts
- Certain contributions to college savings plans such as a 529 plan
- Certain veterans disability benefits
While there are pros and cons to filing for bankruptcy in Indiana, there are many benefits. For some people, it may be the best option for ridding themselves of their overwhelming debt. Experienced attorneys understand the fresh start people can achieve through bankruptcy and may be able to guide one through the process.