In a chapter 7 case, you can keep all property which the law says is “exempt” from the claims of creditors. For Indiana bankruptcy cases, include:
– $17,600 in equity in the home you reside in;
– $9,350 in households goods and nonresidential real estate up;
– $350 in intangible personal property, including choses in action, deposit accounts, and cash (but excluding debts owing and income owing);
– Your right to receive certain benefits such as social security, unemployment compensation, veteran’s benefits, public assistance, and pensions–regardless of the amount.
The amounts of the exemptions are doubled when a married couple files together.
In determining whether property is exempt, you must keep a few things in mind. The value of property is not the amount you paid for it, but what it is worth now. Especially for furniture and cars, this may be a lot less than what you paid or what it would cost to buy a replacement.
You also only need to look at your equity in property. This means that you count your exemptions against the full value minus any money that you owe on mortgages or liens. For example, if you own a $50,000 house with a $40,000 mortgage, you count your exemptions against the $10,000 which is your equity if you sell it.
While your exemptions allow you to keep property even in a chapter 7 case, your exemptions do not make any difference to the right of a mortgage holder or car loan creditor to take the property to cover the debt if you are behind. In a chapter 13 case, you can keep all of your property if your plan meets the requirements of the bankruptcy law. In most cases you will have to pay the mortgages or liens as you would if you didn’t file bankruptcy.