Understanding Homestead and Personal Property Exemptions for Illinois Bankruptcy

When Chicago residents think about filing for consumer bankruptcy, many want to know if they’ll be able to keep their homes and their personal property.  Here’s where bankruptcy exemptions come into play.  While federal bankruptcy exemptions exist, certain states require that debtors use the state exemptions.  In general, Illinois is one of these places.  As a result, anyone who files for bankruptcy in our state typically will exempt their property based on state law in Illinois.
Depending on whether you file for a Chapter 7 bankruptcy or a Chapter 13 bankruptcy, the exemptions will affect you a bit differently.  However, it’s important to have a general idea of the available exemptions for your home and your personal property in Illinois, and to understand how those exemptions can work for you when you file for consumer bankruptcy.
Homestead Exemption
Perhaps one of the most significant exemptions, the homestead exemption allows Illinois residents who file for personal bankruptcy in our state to exempt some of the value from their homes.  How does it work?
In short, you’ll be able to exempt up to $15,000 of value from your personal residence.  It doesn’t matter if you live in a single-family home, a condominium, a mobile home, a farm, or another type of residence.  Regardless of what type of residence you own, you’ll be able to use this exemption.  In our state, spouses may also double the exemption.  In other words, each spouse individual filing for bankruptcy gets the full exemption.  So in cases where two spouses file for a Chapter 7 bankruptcy, they may be able to double the $15,000 exemption to $30,000.
What happens if your home has more than $15,000 in value?  Since you can only exempt $15,000 on an individual basis, consumer bankruptcy can mean that you’ll have to sell your home.  However, the homestead exemption can be complicated, and it’s important to discuss your situation with an experienced Chicago bankruptcy attorney.  Filing for bankruptcy in the Chicago area does not necessarily mean that you’ll have to sell your house.
Other Personal Property
Many different kinds of personal property exist.  Depending on the type of personal property you want to keep after filing for bankruptcy, an exemption may be able to help you out.
What about an automobile?  In Illinois, you can generally exempt up to $2,400 in a motor vehicle.  As with your residence, if there’s more than $2,400 in value in your car, you may have to sell.  However, filing for Chapter 7 bankruptcy doesn’t necessarily mean that you’ll lose the car you have.  Other personal property exemptions can apply.
Next, there’s an exemption for property you need in order to live and work, which includes books for school, necessary clothing, family pictures, and so forth.  You may be able to exempt other personal property, usually up to $4,000 worth, but it’s important to have an Oak Park bankruptcy attorney examine the specific elements of your case.
If you’ve recovered money in a personal injury lawsuit or a wrongful death claim, you also may be able to keep a substantial amount, if not the entirety, of your recovery.  Awards from a crime victim’s compensation fund also are exempt.
Contact an Oak Park Bankruptcy Attorney
Bankruptcy laws can be very complex.  While Chapter 7 bankruptcy protection can be a solution to many debtors in the Chicago area, it’s very important to have an experienced Chicago bankruptcy lawyer assist with your case.  Contact the Emerson Law Firm today to learn about how we can help with consumer bankruptcy.
See Related Blog Posts:
Failure to Report Assets During a Bankruptcy Proceeding Can Have Serious Consequences

Comments

Post a Comment

Popular posts from this blog

Payday Lending and Predatory Lenders in Illinois

If you are in substantial debt in the Chicago area and are living in a paycheck-to-paycheck cycle, you may have taken out a payday loan to make ends meet. While payday lending is illegal in a number of states due to the predatory nature of these loans, it remains legal in Illinois. As a result, many debtors in the state have used payday lenders, and far too many of those borrowers cannot repay what they owe. According to a recent article from Progress Illinois , consumers have filed complaints about payday lenders in the state, illuminating a need for federal rules that address harmful lending practices . Predatory Payday Lenders and Protections for Consumers Due to the perceived predatory nature of payday loans, twelve states in the country have banned these lenders from operating completely, according to a fact sheet from loans.org . The states that currently have laws prohibiting payday lenders from operating include Arkansas, Arizona, Connecticut, Georgia, Mary...
Read more

Phantom Debt Collection Scams on the Rise in Illinois

Have you been contacted by a person claiming to be a debt collector who is seeking to recover a debt you allegedly owe? If so, you are not alone. According to a recent report from CBS Chicago , such parties claiming to be debt collectors are on the rise, and they are scamming Chicago-area residents. These alleged debt collectors are part of schemes known as “phantom debt collection scams,” since they involve the attempt to collect on a debt that the consumer does not actually owe. How can you avoid becoming a victim in a debt-collection scam ? What should you do if you have been targeted by a fake debt collector? How Do Phantom Debt Collection Scams Work? Now, you might be thinking to yourself: I would never agree to make payment on a debt that I did not owe. But the scam is not always that simple. Parties at the center of debt-collection scams often target consumers who do actually owe debts (to someone or to some entity), and they prey on the fact that these c...
Read more

New Information on Debts That Bankruptcy Cannot Discharge

If you are thinking about filing for bankruptcy in the Oak Park area, it is important to know that certain kinds of debts cannot be discharged in a bankruptcy case. Under U.S. bankruptcy law, these are known as non-dischargeable debts, or exceptions to discharge. There are certain types of debts that have long been identified clearly as non-dischargeable debts, while there are misconceptions about other types of debts that may or may not be dischargeable. As an article in CNBC discusses, the U.S. Supreme Court recently issued a ruling in the case of Bartenwerfer v. Buckley , which clarifies that debts incurred due to another party’s fraud cannot be discharged in an individual’s bankruptcy case. Our Oak Park bankruptcy attorneys can explain the Court’s recent ruling and provide you with additional information on dischargeable and non-dischargeable debts. Supreme Court Says Debt Incurred Due to Another’s Fraud is Non-Dischargeable The recent Bartenwerfer case involved a debtor attempti...
Read more