Legal Question in Bankruptcy in Indiana

Exemptions

I have a question about exemptions in regards to bankruptcy. We are thinking of filing for bankruptcy. We owe $40,000 in unsecured debt which we would like to discharge. Our annual salary is $28,500. We are homeowners (1 1/2 years) with a mortgage of $83,000 (house was purchased for $84,500 and appraises for $92,000), and a car with $7,500 left on it (purchased three years ago for $10,500. We are married with no dependents. I know that every situation is different, but under Indiana law, would we get to keep our house and car? Thank you very much.


Asked on 2/16/01, 9:11 pm

2 Answers from Attorneys
Dorene Philpot Philpot Law Office

Re: Exemptions

You are allowed to keep up to $15,000 in equity in a home for a married couple. In addition, you are allowed vehicle equity exemptions, and you are well under those limits, too.

The amount of total debt isn't all that vital. What you have to do is show that your income is so low that there's no way you can pay back 33 1/3 of your debts over a 3-year period.

Sounds like you won't have any trouble showing that.

FYI, if you're going to file for bankruptcy protection, NOW is the time to do it. Congress has approved a bankruptcy "reform" law that is NOT consumer friendly. It won't take effect immediately, but it will very soon.

Hope this answered your questions. Let me know if you have others via e-mail at [email protected] or phone (317) 486-4578.

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Answered on 4/02/01, 8:17 am
John Cook Dunn & Cook

Re: Exemptions

Generally a debor can reaffirm on certain debts such as a personal residence or motor vehicle without any problem. Usually, problems surface when the Debtor is trying to keep a luxury car or mansion, or when the Debtor has too much equity in his personal residence. However, based on the information provided it does not appear to be a problem in your case.

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Answered on 4/02/01, 4:40 pm


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