Chapter 13 Bankruptcies

• A Chapter 13 bankruptcy is not an elimination of most of your debts and assets like a Chapter 7 bankruptcy. In a Chapter 13, you can keep most of your assets and your debt is restructured with input with your creditors. Interest rates may be lowered, some unsecured debt may be forgiven and some debts may be combined.
  
  

Bankruptcy Filings

• While filing your bankruptcy petition in federal court, you must list all of your assets, liabililties, income and expenses. Your IRA will need to be listed as an asset, though you can list it as an exempt asset in Indiana. This means that when you and your creditors consider selling off some of your assets to lower the amount of debt you owe, an IRA won't be included in the discussion.
  
  

Exemptions

• When filing a bankruptcy in Indiana, you must use allowed exemptions found in state law rather than federal exemptions. Indiana once had a cap on the amount of total exemptions, but lawmakers removed the cap in 2005 and exemption amounts are now adjusted for inflation every six years. If you are married, then you can double any of the exemption amounts since the state bankruptcy laws apply to each individual bankruptcy filing.
  
  

IRAs

• Federal law was updated so that nearly all IRAs and other tax-exempt pensions or retirement accounts are not counted in bankruptcy. This particular federal law is in effect even if you are required to use state bankruptcy exemptions. The only exception is that the contributions must have been tax-deductible unless you contributed to a Roth IRA, which does not use tax-deductible contributions.
  
  

Chapter 7

• Even with a Chapter 7 bankruptcy filing when many more of your assets will be sold off to pay down your debt as much as possible before eliminating the remainder, your IRA is still protected under Indiana law.