Tip of the Day for December 7, 2012: “Timing the Filing – What Exemptions Apply”
When you file bankruptcy, you are allowed to keep certain property. The property you can keep is called your exempt property. Exemption laws vary from state to state. The bankruptcy code is a federal law in effect throughout the United States, but when Congress passed the law, it gave the states the right to “opt-out” of the federal list of exemptions. Indiana chose to opt-out. Therefore, Indiana law determines what property is exempt for bankruptcies filed by Indiana residents who have lived here for two years prior to filing their bankruptcy petition. What property is exempt sometimes depends on when you file your petition. If you haven’t lived in Indiana for two years when you file, you can’t use the Indiana exemptions. If you can’t use the Indiana exemptions, you might have to use the exemptions applicable in the state you moved from. If that state’s law says you must be a resident when you file to use its exemptions, then you can use the federal exemptions found in the bankruptcy code even though Indiana opted-out.
If you have questions about what property you can keep if you file bankruptcy, call our office or send us an email at [email protected]