“Intangible” means what cannot be touched (such as referring to cash where you can only touch the paper it is printed on instead of the actual value of the item). This intangible bankruptcy exemption also applies to most financial accounts.

For instance, here’s two practical considerations for the Indiana Intangible Exemption:

1. Cash and Financial Accounts:
You must have less than $350 ($700 if a joint case) in cash when you file. This includes how much is in your bank accounts (or other financial account/cash investments). If you have more than this, it will be taken to pay your creditors. (This does not apply as strictly in Chapter 13, also some retirement accounts are fully exempt in and Indiana bankruptcy ).

2. Tax Refunds:
You may lose part or all of your tax refund. If you have a tax refund coming, part or all of the refund may be taken from you so that something can be paid back to your creditors. Before you file, you may be able to change your withholdings so that you will not receive a large tax refund. DO NOT SPEND YOUR REFUND if the trustee asks for it, or the discharge of your debts can be revoked.

These two practical considerations can help you understand how the “Intangible” exemption can be applied in an Indiana Bankruptcy.

I am frequently asked, "Can Bankruptcy help me with Tax Debts?"

Every other week, the same question comes up.   Can Income Taxes be discharged in bankruptcy?    It’s easiest to understand by going through 5 questions.   Each question inquires into the exact nature of the income tax attempting to be discharged.  If your tax can pass each qualifying question, your income tax debt will likely be dischargeable:

 1. Was the tax return DUE more than 3 years ago?

 The tax return on which the tax debt arises must have been due at least three years before you file for bankruptcy. This date is usually April 15 of the year the return was due. If an extension was filed, then it means August 15 or October 15 of that year, or to the actual required filing date.  

 2. Was the tax return FILED more than 2-Years ago?

 The tax return must be filed at least two years before the bankruptcy (having the IRS file a substitute for return doesn’t count).

 3. Has 240-Days passed since new tax has been assessed?

 All taxes (such as additional tax) must be assessed by the IRS at least 240 days before filing.

 4. Was there any Fraud or Willful Tax Evasion present?

There must not be a fraudulent tax return or a willful attempt to evade paying taxes.

 5. Was the tax assessed for reasons other than regular Income Tax?

 Taxes other than income tax, such as payroll taxes, employee trust fund penalties, fraud penalties, or several other taxes and penalties are by law excepted from bankruptcy discharge.

If your income tax debt can pass these 5 qualifying questions, it is likely that this tax debt would be dischargeable in a Chapter 7 bankruptcy.

 The answer is usually “NO” to these questions, but it is important to understand why.

The reason why you can many times keep property in Chapter 7 is because it is protected by the Indiana Bankruptcy Exemptions.

 “Exempt” property is not subject to the bankruptcy and is protected from being taken in order to help you get a fresh start.    Some examples Indiana exempt property are below:

 You can keep up to $17,600 in equity for your residence (per filing party).

 You can keep up to $9350 in cars and personal property (per filing party).

 You can only keep $350 in cash or various accounts (per filing party- NOTE HOW SMALL THIS AMOUNT IS!)

 These Indiana Bankruptcy exemptions allow our clients many times to protect most if not all of their property when filing Chapter 7.   But, many types of property are NOT exempt in Chapter 7 Bankruptcy in Indiana.    Seek the counsel of an experienced bankruptcy attorney to ensure that you fully understand what types of property are protected in an Indiana bankruptcy.

I was just reminded in a book I recently read that we as humans are almost entirely emotional instead of rational in our decisions and perception of life.

As times continue to get tougher, an overcast of impending doom seems to always hover as a cloud in our emotional landscape. Does that cloud hover behind you just out of sight?

That cloud needs to go! We got work to do! Our nation, our individual lives—they both need some serious work no matter what economic level we find ourselves. What needs to be done should be done!

We need to redo our budgets. Rebuild our portfolios. Find the new job or business niche! Remember, every time something goes down in economics, other areas go up. Don’t let this overcast of economic doom compromise you emotionally, or even rationally. Reality is whatever you believe!

Everytime I think of the economy, I cannot escape the idea of FUNDAMENTALS. Maybe we should all work on our fundamentals and not listen to the general tide of “we gotta stimulate and spend our way outta this mess.” What got us into this mess surely cannot get us out.

Let’s forget the dark clouds and focus on what needs to be done. How can your fundamentals (such as positive assets and your budget) be solid in a year? Instead of staying in the gloom, make a solid, sensible plan and see where it takes you in one year. End of the world? No way! It’s a new beginning.