Indiana Garnishment Exemptions

Before you spend money on garnishment filings and service fees, you need to know what Indiana law protects from collection. Chasing exempt property wastes time, court costs, and — if the debtor objects — gets you nowhere.

Indiana has opted out of federal bankruptcy exemptions and runs its own statutory exemption scheme under IC 34-55-10-2. These amounts are adjusted periodically by the Indiana Department of Financial Institutions (DFI) under 750 IAC 1-1-1.

Property Exemptions

These are the current exemption caps, effective through 2026:

Homestead (primary residence): $22,750 per individual, $45,500 for joint debtors. This protects equity in the debtor's home or any personal property used as a primary residence. If the debtor's home has $100,000 in equity, your judgment lien reaches $77,250. If the equity is under $22,750, a forced sale produces nothing for you.

Other real estate and tangible personal property: $12,100 in combined value per individual, $24,200 for joint debtors. This covers household goods, furniture, tools of the trade, clothing, and motor vehicles. A paid-off car worth $10,000 fits within the individual cap only if the debtor's other property does not use the rest of the aggregate exemption.

Intangible personal property: $450 per individual, $900 for joint debtors. This covers cash, bank account balances, stocks, and securities in the aggregate, not as a separate allowance for each account. When you garnish a bank account, this exemption applies across the debtor's intangible property.

Wage Garnishment Limits

Indiana follows the federal formula. The maximum garnishable amount each pay period is the lesser of:

• 25% of disposable earnings, or
• The amount by which disposable earnings exceed 30 times the federal minimum wage ($217.50 per week)

Disposable earnings are gross pay minus mandatory deductions (federal, state, and local taxes, Social Security, Medicare). Voluntary deductions like retirement contributions or health insurance do not reduce the calculation.

If the debtor's weekly disposable earnings are $217.50 or less, nothing can be garnished. Between $217.50 and $290, you get only the amount above $217.50. Above $290, the cap is 25%.

Federal Benefit Protections

Certain income sources are completely exempt from garnishment under federal law, regardless of Indiana's state exemptions:

• Social Security benefits
• Supplemental Security Income (SSI)
• Veterans Affairs (VA) benefits
• Railroad Retirement benefits

These protections apply to both wage-style garnishment and bank account garnishment. Under 31 CFR Part 212, when a bank receives a garnishment order, it must automatically calculate the total federal benefits deposited in the previous two months and keep that amount fully accessible to the debtor.

The bank automatically protects qualifying direct-deposited benefits from the prior two months. Benefits outside that automatic lookback remain exempt under federal law, but the debtor may need to claim and document the exemption. If an account holds only protected benefits, there are no nonexempt funds available for turnover.

What This Means for Your Collection Strategy

Understanding exemptions saves you from wasting enforcement costs on unreachable assets. Before filing for garnishment, assess:

• Wages: Does the debtor earn enough that 25% of disposable earnings is meaningful? A debtor making minimum wage yields little to nothing.
• Bank accounts: Is the account funded primarily by exempt federal benefits? The two-month lookback may protect the entire balance.
• Personal property: Is the debtor's car, furniture, or equipment worth more than $12,100? Below that threshold, a writ of execution produces nothing.
• Real estate: Is the home equity above $22,750? Below that, the lien still clouds title but a forced sale is not practical.

The strongest collection positions involve debtors with steady employment above minimum wage, non-exempt bank balances, or real estate with significant equity above the homestead cap.

For a complete exemption table alongside each enforcement tool — so you can match the right collection method to the debtor's actual financial picture — the Collecting a Small Claims Judgment in Indiana guide covers all of it.

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