How to File Chapter 7 Bankruptcy in Indiana: Exemptions and Costs

To file Chapter 7 bankruptcy in Indiana, you confirm you meet the residency and income tests, complete a pre-filing credit counseling course, submit a voluntary petition and supporting schedules to the federal bankruptcy court for your district along with a $338 filing fee, attend a short meeting with a court-appointed trustee, finish a second financial management course, and wait for the discharge order. Most consumer cases close in about four months, and most filers keep all of their property because it fits within Indiana’s exemption limits.

Step 1: Confirm You Qualify

Two gates stand between you and a Chapter 7 case: where you’ve been living, and how much you earn.

You can file in Indiana if the state has been your primary residence for the greater part of the 180 days before filing.1Office of the Law Revision Counsel. 28 US Code 1408 – Venue of Cases Under Title 11 If you moved here less than 91 days ago, your previous state’s bankruptcy court likely has jurisdiction instead.

Then comes the means test, which checks whether you genuinely can’t repay your debts or whether you should be in a Chapter 13 repayment plan.2Office of the Law Revision Counsel. 11 US Code 707 – Dismissal of a Case or Conversion to a Case Under Chapter 11 or 13 Start with your household income over the past six months, annualized, and compare it to Indiana’s median. For cases filed on or after April 1, 2026, the Indiana median income figures are:

  • One earner: $64,461
  • Household of two: $81,986
  • Household of three: $95,627
  • Household of four: $115,656 (add $11,100 for each additional person)

These numbers come from the U.S. Trustee Program and update roughly every six months, so check the current table if your filing date falls near a transition.3U.S. Trustee Program. Census Bureau Median Family Income By Family Size If your income is at or below the median for your household size, you pass automatically.

If you’re over the median, you move to the second phase. That calculation subtracts IRS-approved living expenses for housing, transportation, healthcare, and other necessities from your monthly income. The remainder, multiplied by 60, represents what you could theoretically pay creditors over five years. If that number is high enough, a “presumption of abuse” kicks in and the court may dismiss the case or push you to Chapter 13.2Office of the Law Revision Counsel. 11 US Code 707 – Dismissal of a Case or Conversion to a Case Under Chapter 11 or 13 You can try to overcome the presumption by showing special circumstances like serious medical conditions or active military service, but the burden is on you.

Step 2: Finish Credit Counseling and Gather Your Records

Before you can file, federal law requires a credit counseling session with a nonprofit agency approved by the U.S. Trustee’s office.4Office of the Law Revision Counsel. 11 USC 109 – Who May Be a Debtor The session runs about an hour, can be done by phone or online, and must happen within 180 days before you file. The agency issues a certificate that goes in with your petition.5United States Department of Justice. Credit Counseling and Debtor Education Information Skip the session and the court will dismiss your case.

You’ll also need a complete picture of your finances before you can fill out the forms accurately. Pull together:

  • Six months of income documentation: pay stubs, pension statements, Social Security letters, side income
  • A full inventory of what you own with estimated values: real estate, vehicles, bank accounts, retirement funds, household goods, jewelry
  • A list of every creditor with name, address, account number, and balance
  • Monthly totals for housing, food, transportation, utilities, insurance, and healthcare
  • Your most recent filed tax return

Credit reports from all three major bureaus help catch stray medical bills and old collection accounts. A debt you forget to list may survive the discharge, so the time spent cross-checking pays off.

Step 3: File the Petition

The core document is Official Form 101, the Voluntary Petition for Individuals Filing for Bankruptcy.6United States Courts. Voluntary Petition for Individuals Filing for Bankruptcy Attached are schedules covering your property, exempt assets, secured and unsecured creditors, executory contracts, income, and expenses. Numbers on the schedules must line up with your source documents; discrepancies between, say, a bank statement and your reported balance invite scrutiny from the U.S. Trustee.

If you have secured debts like a car loan or financed furniture, you also file Official Form 108, the Statement of Intention, within 30 days of your petition or by the date of your creditors’ meeting, whichever is earlier.7United States Courts. Statement of Intention for Individuals Filing Under Chapter 7 On it you declare whether you’ll surrender the property, redeem it, or reaffirm the loan. Each named creditor must receive a copy.

Indiana has two federal bankruptcy districts. The Northern District has offices in South Bend, Fort Wayne, and Hammond; the Southern District is based in Indianapolis with additional offices in Terre Haute, Evansville, and New Albany. You file in the district where you live. Attorneys submit electronically through the court’s CM/ECF system. Pro se filers typically deliver paper copies to the clerk’s office in person or by mail.

The Chapter 7 filing fee is $338.8United States Courts. Bankruptcy Court Miscellaneous Fee Schedule If you can’t pay all at once, Official Form 103A lets you request an installment plan of up to four payments.9United States Courts. Application for Individuals to Pay the Filing Fee in Installments Official Form 103B requests a full waiver if your household income is below 150 percent of the federal poverty guidelines and you can’t afford installments.10United States Courts. Application to Have the Chapter 7 Filing Fee Waived

The moment the clerk accepts your petition, an automatic stay takes effect, and creditors must stop collection activity: lawsuits, wage garnishments, bank levies, and phone calls.11Office of the Law Revision Counsel. 11 US Code 362 – Automatic Stay

Step 4: Attend the 341 Meeting and Finish the Second Course

About 20 to 40 days after filing, you’ll attend a Meeting of Creditors, also called the 341 meeting.12United States Department of Justice. Section 341 Meeting of Creditors It isn’t a courtroom hearing. The trustee runs it, usually in a conference room, and asks you questions under oath about your income, assets, and the accuracy of your schedules. Bring a government-issued photo ID and proof of your Social Security number. Creditors may show up but almost never do in routine consumer cases. The meeting itself often takes ten minutes or less.

After the 341 meeting, finish the second required course: a financial management (debtor education) course covering budgeting and credit skills. File the certificate of completion with the court. If that certificate never gets filed, the court closes your case without a discharge and your debts remain intact. It’s one of the most common ways people lose a discharge, and it’s entirely preventable.

Meanwhile, the trustee reviews each asset. Property fully covered by exemptions, or that would cost more to sell than it’s worth, gets abandoned back to you.13Office of the Law Revision Counsel. 11 USC 554 – Abandonment of Property of the Estate Anything listed in your schedules that hasn’t been administered by the time the case closes is also abandoned to you.

Creditors and the U.S. Trustee have 60 days from the first date set for the 341 meeting to object to your discharge.14Legal Information Institute. Federal Rules of Bankruptcy Procedure Rule 4004 – Granting or Denying a Discharge If the window closes with no objections and all requirements are met, the court issues the discharge. Most Indiana filers receive it roughly 60 to 90 days after the 341 meeting. The discharge permanently eliminates your personal liability on qualifying debts, but it does not remove valid liens on secured property.

What You Get to Keep: Indiana’s Exemptions

Indiana does not allow filers to use the federal exemption set. You must use Indiana’s, which protect specific categories of property up to set dollar limits. Everything within the caps stays yours; only value above a cap is available to the trustee.

Indiana has no dedicated motor vehicle exemption. Vehicle equity has to come out of the $8,000 tangible personal property allowance. For a filer whose car is worth $6,000 free and clear, that leaves only $2,000 for everything else in that category, including furniture and electronics. This is where Chapter 7 in Indiana gets tight compared to states with separate vehicle allowances, so run the numbers before filing.

Certain property is protected by separate statutes regardless of the caps. Retirement accounts that qualify under federal tax rules, Social Security benefits, and workers’ compensation payments generally cannot be touched by the trustee.

Decisions on Secured Debt

Chapter 7 wipes out your personal obligation on a debt, but if a lender has a lien on your car or financed furniture, the lien itself doesn’t disappear. On Form 108 you pick one of three paths:

  • Surrender: hand the property back. The remaining balance becomes unsecured debt and gets discharged. This is the simplest option when the property isn’t worth fighting for.
  • Redemption: pay the lender the current fair market value of the property in a single lump sum, regardless of what you still owe. This works well when the loan is far underwater, but the lump-sum requirement makes it impractical for many filers. Redemption applies only to tangible personal property used for personal or family purposes.17Office of the Law Revision Counsel. 11 US Code 722 – Redemption
  • Reaffirmation: sign a new agreement to keep paying the original debt as if the bankruptcy never happened. You keep the property as long as you keep paying, but you’re personally liable again. If you later default, the lender can repossess and sue you for any deficiency. The agreement must be filed before the discharge is entered, and a judge reviews it for undue hardship.

Reaffirmation deserves careful thought. Filers often reaffirm car loans out of fear of losing transportation and end up underwater on a depreciating asset with no bankruptcy protection. If the math doesn’t work in your favor, surrender and a cheaper replacement vehicle may be the better move.

Debts Chapter 7 Won’t Erase

A Chapter 7 discharge eliminates most unsecured debt, but several categories survive no matter what.18Office of the Law Revision Counsel. 11 USC 523 – Exceptions to Discharge The ones that catch people off guard most often:

  • Domestic support obligations: child support and alimony are never dischargeable.
  • Most student loans: they survive unless you can prove repaying them would impose an “undue hardship,” a standard that is notoriously hard to meet.
  • Recent tax debts: income taxes generally can’t be discharged unless the return was due more than three years ago, was filed on time (or at least two years before the petition), and the IRS hasn’t assessed the tax within the last 240 days.19Internal Revenue Service. Declaring Bankruptcy
  • Debts from fraud or false statements: credit card charges run up through misrepresentation or a forged loan application stick.
  • Debts from intentional harm: court judgments for deliberate injury to someone or their property can’t be wiped out.
  • Government fines and penalties: criminal restitution, traffic tickets, and similar obligations remain.

Any debt you forget to list in your schedules may also survive. Cross-check your creditor list against your credit reports before filing.

What It Costs

The court’s filing fee is $338.8United States Courts. Bankruptcy Court Miscellaneous Fee Schedule On top of that, expect to pay for both required courses. Credit counseling agencies typically charge $10 to $50, and the financial management course falls in roughly the same range. Both are available online.

Attorney fees for a straightforward consumer Chapter 7 in Indiana generally fall in the $750 to $1,500 range, with complex cases involving business debts, contested exemptions, or significant assets running higher. Many bankruptcy attorneys offer a free initial consultation and accept payment plans, since the fee must be paid before filing. You can’t include your lawyer’s bill in the bankruptcy. Filing pro se is legal but carries real risk: errors in your schedules or means test calculation can lead to dismissal, a denied discharge, or allegations of fraud.

How Chapter 7 Shows Up on Your Credit

A Chapter 7 bankruptcy can appear on your credit report for up to ten years from the date the court enters the order for relief.20Office of the Law Revision Counsel. 15 USC 1681c – Requirements Relating to Information Contained in Consumer Reports That’s the federal maximum; some bureaus remove it earlier, but don’t plan on it.

The practical impact is heaviest in the first two to three years. A mortgage immediately after discharge is unlikely, though secured credit cards and credit-builder loans are available almost right away. Most filers see meaningful score improvement within 12 to 18 months of discharge, in part because discharged debts stop generating late payments and collection entries. By year four or five, filers who’ve been disciplined about rebuilding often qualify for conventional financing at reasonable rates.