Indiana Exemption Laws and Your Car
Indiana bankruptcy laws do not contain a specific exemption for cars. However, it is possible to file bankruptcy in Indiana and keep your car. The issue will hinge on the value of your car and whether it is encumbered by a loan. Although there is no law specifically devoted to exempting cars, Indiana bankruptcy law does allow debtors to protect $8,000 of property through a wildcard exemption. Indiana’s wildcard exemption can be used to protect additional real estate holdings, cars or other property such as home furnishings.
How does the Indiana wildcard exemption work to protect your car? Let’s say you own a 1999 Ford pickup truck worth $6,000 with an outstanding loan balance of $4,000. In this example, the wildcard exemption could be used to protect the $2,000 of equity you have in the Ford plus $6,000 of additional property. By contrast, if the Ford were worth $10,000, there would be $2,000 of non-exempt value. In this case, the trustee could try to sell your truck but would be more likely to accept a cash payment to “buy out” the non-exempt value. Indiana bankruptcy laws can be complex, if you have questions consult an attorney.
Please note that a recent move may impact what exemption laws apply to your bankruptcy case. If you have moved within the last two years or are considering moving please read: A recent move may impact your ability to protect property in bankruptcy.