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To file bankruptcy in Indiana, you must have lived in Indiana for the two years or 730 days prior to filing. If you have not lived in Indiana for the past two years, you follow the laws of the state lived in during the 180-day period prior to the two-year period.
If the residency requirements of the states involved leave you ineligible to file under either state's laws, then you may be able to file under federal law.
Generally, in Indiana, all or a portion of your property is protected from seizure by creditors in a Chapter 7 bankruptcy. In a Chapter 13 bankruptcy in Indiana, the person filing typically gets to retain all their assets and property.
Indiana is not a community-property state, meaning that a person filing for bankruptcy will not be liable for a spouse's debts unless he or she voluntarily assumed those debts, such as by co-signing a loan.
In Indiana, real estate exemptions, or property that may not be seized, include $15,000 in personal property, a farm, or a condominium. Also exempted is up to $300 in intangible personal property, all prescribed health aids, and $8,000 in tangible personal property or other real estate. Intangible personal property can include things like stocks, bonds, trademarks, and copyrights. Cars are not specifically exempted in Indiana.
Regardless of the state, there are two basic methods for filing bankruptcy either under Chapter 7 or Chapter 13.
In Chapter 7, an individual who files for bankruptcy will not have a repayment plan for those debts that are discharged. Chapter 7 is not as lengthy a process as Chapter 13, as most Chapter 7 bankruptcies only take about 4 to 6 months to complete. Although rare, in Chapter 7, a bankruptcy court can liquidate a person's assets to pay the debts. However, individual states have specific exemptions such as those listed above for Indiana.
In Chapter 13, there is a court-ordered repayment plan for the person filing for bankruptcy. Typically, the full debt is not repaid, but rather, a portion.
Chapter 13 bankruptcy is more involved and therefore takes longer to complete, on average about 3 to 5 years. Chapter 13 is not a liquidation bankruptcy, so all a person's assets are protected, even those not covered under the exemptions.
Filing for bankrupty is often a last resort for debtors who are unable to gain control of their finances. The U.S. Bankruptcy Code outlines the process by which bankruptcy cases are filed and completed. In addition to federal guidelines, every state also enforces local rules and laws regarding bankruptcy filings.
Prior to filing a bankruptcy petition, you are required to pass a means test to detemine your eligibility to file. The means test is based on your income and household size using guidelines established by the Census Bureau. In order to file a Chapter 7 petition, your median income for the six months prior to filing must be at or below the median for your household size. As of 2009, a single filer in South Dakota must have a median income of no more than $36,844, according to Bankruptcy Action. A couple filing jointly is allowed a median income of no more than $54,331.
If you are filing Chapter 13 bankruptcy, the means test is used to determine the length of your repayment plan. If your median income is less than your state's median for your family size, you are only required to submit to a three-year plan. If your median income is higher, you are required to submit to a five-year repayment plan.
In a Chapter 7 or Chapter 13 bankruptcy, you are allowed to exempt a certain amount of assets that cannot be seized by the court. These exemptions typically include a specificed amount of real and personal property, including cash assets. As of 2009, South Dakota residents are allowed to claim a homestead exemption of unlimited value for real property that is registered in the state at least six months prior to filing, according to The Bankruptcy Site. Property must be no larger than 1 acre if in town or 160 acres elsewhere. Debtors may claim a personal property exemption of up to $6,000; tax-exempt retirement accounts up to $1,095,000 per person; life insurance proceeds up to $10,000; health benefits up to $20,000; and compensation from public assistance, crime victims funds, workers' compensation or unemployment.
In the state of South Dakota, you are not required to be represented by an attorney to file. You are, however, required to attend certified credit counseling at least six months prior to filing. The District Court of South Dakota requires you to pay a filing fee of $299 for a Chapter 7 case or $274 for a Chapter 13 filing. These fees must be paid at the time your petition is submitted unless you are also submitting a petition to pay in installments or have the fee waived. Within 14 days of filing, you are required to submit a complete list of your debts and assets, along with a statement of financial affairs. In a Chapter 13 filing, you are also required to submit a copy of your repayment plan.