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

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