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Indiana Homestead Laws

Each state has what are known as homestead protection laws that are designed to protect homeowners from losing their homes as a result of economic hardship. These laws can sometimes allow individuals to designate a parcel of real property as a "homestead," and therefore keep it off limits to certain creditors. Indiana homestead laws allow people to claim as much as $10,000 worth of property as a homestead.

Indiana Homestead Statutes

Indiana homestead laws, unlike those in many other states, don't place a cap on the maximum acreage that may be designated. Instead, you can protect the entire property if you file for bankruptcy, although some limits are placed on the total value. Under Indiana law, the property cannot be valued at more than $10,000 for a single individual. The basic provisions of Indiana homestead laws can be found in the table below.

Code Section

34-55-10-2

Max. Property Value That May Be Designated 'Homestead'

$7,500 for residential; $4,000 for other real estate or tangible personal property; $100 for intangible personal property; total value of property may not exceed $10,000

Maximum Acreage (Urban)

-

Maximum Acreage (Rural)

-

Even under Indiana homestead protection, there are four general exceptions where creditors could still force the sale of property to collect debts owed to them:

  • If you specifically pledged the homestead property as credit for a mortgage;
  • If there was a pre-existing lien on the property before the establishment of homestead;
  • If you owe past due taxes to the State of Indiana and Indiana counties or municipalities; or
  • If you owe money to mechanics, contractors, or builders for work performed in repairing or improving the property.

Also, because the homestead exemption is a state law, it is subject to the Supremacy Clause of the United States Constitution. This means that federal law can override it. Therefore, any federal income tax liens would be superior to Indiana’s state homestead protection law. Generally, however, the Internal Revenue Service has been reluctant to foreclose on a taxpayer's home in order to enforce tax liens, and normally will only get involved if the property is mortgaged or sold before the tax lien expires.

Indiana Homestead Laws: Related Resources

Indiana’s real estate laws can seem convoluted. If you would like legal assistance with a real estate or bankruptcy case, you can contact an experienced Indiana bankruptcy attorney or Indiana real estate attorney. You can also visit FindLaw’s homestead protections section for more general information on this topic.

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