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Many people have debts that they cannot pay. They struggle from month to month to pay their living expenses. If you are struggling with debts, there is help. A Chapter 7 bankruptcy in Indiana can get rid of the debts you cannot pay and help you take control of your finances. You can get the fresh start you need to build a healthier financial future for yourself and your family.

To help, we have prepared an overview of some of the most important information about Chapter 7 bankruptcy in Indiana. Secondly, it’s important to understand bankruptcy types, estimate Chapter 7 qualification, understand the pros and cons, and know Indiana specifics.

Click on any of the following subjects in the Table of Contents or read through the article for more information. 

A Chapter 7 bankruptcy in Indiana eliminates most or all of your unsecured debts. Unsecured debts include credit cards, personal loans, medical bills, judgments, and some older tax debts. However, is Chapter 7 right for you? 

1. Chapter 7 vs. Chapter 13 Bankruptcy

The main difference between Chapter 7 and Chapter 13 is that Chapter 13 is a repayment plan. Debtors in Chapter 13 repay a portion of their unsecured debts. They can also repay back taxes, past due mortgage payments, and car loans over time through their Chapter 13 plan. Individuals who file under Chapter 7 cannot afford to repay their debts. 

Let’s look at some of the key differences between Chapter 13 and Chapter 7 bankruptcy in Indiana.

FAQs About Chapter 7 bankruptcy cases:

FAQs about Chapter 13 bankruptcy cases:

  • Chapter 13 is a voluntary repayment plan
  • Most Chapter 13 plans take 60 months to complete
  • Chapter 13 stays on your credit report for seven years
  • It is more expensive to file Chapter 13 than to file Chapter 7 
  • Chapter 13 helps you protect property from repossession and foreclosure
  • The bankruptcy trustee in Chapter 13 does not liquidate property

There could be other facts to consider, depending on your financial situation and history. It is best to weigh the pros and cons of filing under each chapter of bankruptcy carefully before deciding.

2. Estimating Chapter 7 Income Qualifications for Indiana

Before you file under Chapter 7, you need to ensure that you meet the income qualifications for a bankruptcy discharge. The bankruptcy discharge releases your legal liability to repay a debt. Without the bankruptcy discharge, your debts are not forgiven. 

Do I Qualify For Chapter 7 Bankruptcy in Indiana?

The median income for Indiana households is the measure used to determine if you meet the income qualifications for a Chapter 7 bankruptcy in Indiana. If your household income exceeds the median income for a household of your size in Indiana, you may or may not qualify for Chapter 7. Let’s look more closely at how median income is calculated.

The Means Test calculates your current monthly income, median income, and disposable income. Each figure is important.

Current Monthly Income

Your current monthly income is the average of the six months’ income before filing Chapter 7. It includes income received from all sources except Social Security income. Even if your spouse does not file bankruptcy with you, you must include your spouse’s income in the calculations.

You can use our average income calculator to help you estimate your current monthly income for the Means Test.

Median Income 

Your median income equals your current monthly income multiplied by 12. Compare your median income to the median income for a household of your size to see if you might qualify for Chapter 7. The median income levels are adjusted periodically for inflation.

You can also use our Indiana Chapter 7 Calculator below to estimate whether you might qualify for a bankruptcy discharge under Chapter 7.

My Chapter 7 Income Was Over Indiana’s Median Income. Does That Mean I Don’t Qualify?

If your median income is above the Indiana median income, do not worry. You may qualify for a Chapter 7 case if your disposable income is below a certain amount. Disposable income is the amount of money left over each month that you can use to pay your unsecured debts. 

To calculate disposable income, subtract your living expense from your current monthly income. However, some living expenses are limited to the national standards based on family size. Also, some expenses are not permitted.

We developed a calculator that can help you estimate disposable income. If your median income exceeds the state levels, contact us for more information and to try the calculator. 

What Does Chapter 7 Bankruptcy in Indiana Cost? Can I Afford It?

The filing fee for a Chapter 7 bankruptcy case is $335 in Indiana. You also must complete two bankruptcy courses. The cost of the credit counseling course and the debtor education course range from $10 to $50, depending on the agency you choose. 

You might be able to waive the filing fee and the fee for the bankruptcy courses if your income is very low. Ask the course provider for information about waiving the fees.

The most expensive cost of filing Chapter 7 bankruptcy in Indiana is the attorneys’ fees. However, many attorneys have affordable payment plans to make it easier for individuals to file Chapter 7. 

If you are interested, try our Indiana Bankruptcy Lawyer Fee Calculator. It estimates the fees charged by Chapter 7 bankruptcy lawyers near you. We can help you arrange for a free consultation with a Chapter 7 bankruptcy lawyer to discuss whether filing Chapter 7 is right for you.

Indiana Bankruptcy Legal Aid

Some individuals might qualify for legal aid if they cannot afford to pay a bankruptcy lawyer. Resources you might want to consider include:

You can also contact the local bar association in the county where you live for information about legal aid services in your specific area.

3. Should I File Chapter 7 Bankruptcy in Indiana?

Before you decide to file Chapter 7 bankruptcy in Indiana, you should consider a few more things. 

Indiana Chapter 7 Bankruptcy Exemptions

You are permitted to keep specific property when you file under Chapter 7. Bankruptcy exemptions list the property that cannot be used to repay your unsecured debts in a Chapter 7 case. 

Debtors in Indiana cannot choose between state bankruptcy exemptions and federal bankruptcy exemptions. If you are a resident of Indiana for at least 730 days before filing bankruptcy, you must use the Indiana bankruptcy exemptions.

Most people are worried about keeping their homes and keeping their vehicles when filing Chapter 7. 

Indiana’s homestead exemption allows a debtor to protect up to $19,300 in equity in their home. Married debtors can double the exemptions. 

Indiana does not have a vehicle exemption. However, debtors can use the wildcard exemption to protect up to $10,250 in equity in a vehicle or other personal property. Married debtors can also double the wildcard exemption. 

Most people who file under Chapter 7 keep all their property. However, it is always best to check with a Chapter 7 bankruptcy lawyer before filing bankruptcy to determine if any of your assets could be at risk of being sold by a Chapter 7 trustee.

You can read our blog about homestead exemptions to learn more about when a Chapter 7 trustee can sell assets.

How Does Chapter 7 Bankruptcy Affect Your Credit?

A common worry about filing Chapter 7 bankruptcy in Indiana is how filing bankruptcy affects your credit. In most cases, a person’s credit rating has already been damaged by the time the person files bankruptcy. Late payments and collections can cause your credit score to drop very quickly. 

However, filing bankruptcy gives you a fresh start. You can begin rebuilding your credit as soon as your Chapter 7 case closes. Bankruptcy debts are able to buy a home, finance a car, rent a home, and obtain credit sooner than they believe. You do not need to wait years after Chapter 7 to improve credit. 

Pros and Cons of Chapter 7 Bankruptcy

We have covered some of the pros and cons of Chapter 7 above. Let’s put them in one list.


  • Get rid of thousands of dollars in unsecured debts
  • Cases can be closed in four to six months
  • Can stop wage garnishments and debt collections 
  • Less costly than filing Chapter 13


  • Stays on a credit report for ten years
  • Could lose property 
  • Damages credit for a short time
  • Does not get rid of taxes, student loans, alimony, and child support
  • Does not help with past due mortgage payments or car loan payments

Talk with a Chapter 7 bankruptcy lawyer to decide if the pros of Chapter 7 outweigh the cons of filing Chapter 7. 

Chapter 7 Bankruptcy Alternatives

Some individuals find that other debt-relief options work better for them than filing a Chapter 7 bankruptcy case. Chapter 7 bankruptcy alternatives you might want to explore include:

You can also use our Debt Freedom Portal to track your progress as you work to resolve your debt problems and get more information about debt solutions in Indiana. 

4. What Else Is Important About the Indiana Chapter 7 Bankruptcy Process?

Just a couple more topics to cover as you consider filing Chapter 7 bankruptcy in Indiana. 

Filing Bankruptcy in Indiana Process

The Chapter 7 process is similar in all cases. Each bankruptcy case is unique, but most Chapter 7 cases follow this process:

  • Check to see if you qualify for Chapter 7
  • Decide if you want to file Chapter 7
  • Consult with a Chapter 7 bankruptcy lawyer
  • Decide if you want to file under Chapter 7
  • Complete your credit counseling course
  • Complete and file the Chapter 7 petition, schedules, and statements (when you hire a lawyer, he handles this for you)
  • A Chapter 7 Trustee is assigned to your case (list of Indiana Chapter 7 trustees)
  • Complete your debtor education course
  • Attend bankruptcy hearing (341 First Meeting of Creditors)
  • Receive your bankruptcy discharge

Having a Chapter 7 bankruptcy lawyer to guide you through the process protects your best interests and reduces stress.

Indiana Bankruptcy Districts

Indiana is divided into two bankruptcy districts. Each district handles cases filed in the counties covered by that district. Your residence at the time of filing determines which district handles your case.

The Southern District of Indiana holds court in Indianapolis, Terre Haute, Evansville, and New Albany. The court has jurisdiction over 60 counties in Indiana. 

The Northern District of Indiana has jurisdiction over 32 counties in Indiana. There are four divisions – South Bend, Hammond, Fort Wayne, and Hammond Division at Lafayette.

Each bankruptcy district has local rules that apply in cases filed in the district. If you file without an attorney, you need to be aware of the local rules, in addition to the laws and rules governing cases filed under Chapter 7 of the Bankruptcy Code.

What Indiana Chapter 7 Bankruptcy Questions Can We Answer?

Do you have questions about Chapter 7 bankruptcy in Indiana? Ascend is here to help. We provide information and resources to help individuals as they work to resolve their debt problems. You can take our calculator to estimate Chapter 7 qualification in Indiana below or reach out directly to us.

Reach out to us for more information. If you have not done so already, use the Indiana Chapter 7 Calculator below to begin evaluating your debt relief options. 

Post Author: Ben Tejes

Ben Tejes is a co-founder and CEO of Ascend Finance. Before Ascend, Ben held various executive roles at personal finance companies. Ben specializes in Chapter 13 Bankruptcy, Debt Settlement, Chapter 7 Bankruptcy and debt payoff methods. In his free time, Ben enjoys spending time going on adventures with his wife and three young daughters.

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