What Property Will I be Able to Keep if I File for Bankruptcy?

If you are considering consumer bankruptcy, then you may be wondering how a personal bankruptcy filing will impact the belongings you currently have. For example, will you be able to keep your house, or does all of the equity in your home need to be turned over to the bankruptcy trustee? Can you keep your motor vehicle? How do bankruptcy courts handle property that has sentimental value, such as family photos or jewelry that you consider to be a family heirloom? The amount and kind of property that you will be able to keep if you file for bankruptcy depends upon the type of bankruptcy you are filing for, and then it depends upon the kind of property you have and want to retain according to Illinois’s bankruptcy exemptions. Let us explain in more detail.

If You File for Chapter 13 Bankruptcy
If you are planning to file for Chapter 13 bankruptcy, you should know immediately that this is not a liquidation bankruptcy. To be clear, you will not need to liquidate your property up front in order to repay creditors. Rather, this is a type of reorganization bankruptcy in which you have an opportunity to reorganize your debts and to repay creditors over a period of time. As such, Chapter 13 bankruptcy can actually allow you to keep a very important type of property that you could be at risk of losing due to foreclosure — your home. Unlike Chapter 7 bankruptcy, a Chapter 13 bankruptcy can allow a debtor to get back on track with monthly mortgage payments, to avoid foreclosure, and ultimately to stay in the home.

So, if you are planning to file for Chapter 13 bankruptcy, the Illinois bankruptcy exemptions are less important up front. Your bankruptcy lawyer can explain in more detail when the exemptions might come into play in your case.

Filing for Chapter 7 Bankruptcy and Liquidating Non-Exempt Assets
When you file for Chapter 7 bankruptcy, this is a liquidation bankruptcy. Accordingly, any non-exempt property will be liquidated (sold) in order to repay creditors so that your debts can be discharged. Now, what type of property is exempt in Illinois? In other words, what property will you be able to keep if you file for Chapter 7 bankruptcy? The following is a list of some of the Illinois bankruptcy exemptions that may be applicable to you. There are others, so do not assume that this is a complete list. You should speak with an Oak Park bankruptcy attorney about your specific situation to determine which Illinois personal property bankruptcy exemptions may apply to you or may be useful to you. Here are some of those exemptions:
  • Homestead exemption: Keep up to $15,000 in equity in your home;
  • Motor vehicle exemption: You can keep up to $2,400 in a motor vehicle;
  • Wildcard exemption: You can keep up to $4,000 in any personal property you want that is not real estate—you can use it all for a single item or spread it out over multiple items;
  • Personal injury award exemption: Up to $15,000;
  • Pensions and retirement accounts: Many are 100% exempt;
  • Clothes: Necessary apparel is completely exempt;
  • Family photos: You can keep all of these;
  • School books: These are entirely exempt;
  • Tools for your trade: Whether you use physical tools or professional books to complete your work, you can exempt up to $1,500 of these;
  • Workers’ compensation benefits: You can keep all of these benefits; and
  • Veteran’s benefits: These benefits are completely exempt.
Contact an Oak Park Bankruptcy Lawyer

Do you have questions about exempting property in your bankruptcy case? An experienced Oak Park bankruptcy attorney can assist you. Contact the Emerson Law Firm to speak with a consumer protection advocate at our firm today.


See Related Blog Posts:

What Role Does Mortgage Debt Play in Consumer Debt?



10 Things You Should Know About Consumer Bankruptcy

Comments

Post a Comment

Popular posts from this blog

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

Learning About Different Types of Wills

Whether you are young or old, single or married, wealthy or with limited financial means, healthy or dealing with a medical condition, it is important to make a will. Many people have incorrectly heard that wills are only necessary for particular people, such as those with a substantial amount of assets or for older adults in poor health. Yet wills are critical for adults of all ages, and an experienced Oak Park estate planning lawyer can help you to make one. Before you begin working with a lawyer on a will, you might start conducting your own research into wills in Illinois and the requirements for a valid will. In so doing, you are likely to come across information about many different types of wills, and you are probably going to wonder whether you will need more than one kind of will. In short, there are different terms that can be used to describe the form or function of a will, as well as some distinct types of wills. Our Oak Park estate planning attorneys can explain in more
Read more

Younger Parents Need an Estate Plan

It is critical for younger parents to have an estate plan, even if they know they are healthy and do not anticipate that anything will happen in the near future. Much too often, younger parents assume that they can wait until they are older to consider estate planning or until there is a health-related reason to begin the estate planning process. Yet estate planning is critically important for parents who have minor children. While estate planning is important for adults of all ages, it can allow parents to make important decisions about who will care for their children in the event that they become unable to do so themselves. Our Oak Park estate planning lawyers can explain in more detail. Naming a Guardian for Your Minor Children in Your Will Most importantly for younger parents, making a will allows you to name a guardian who can care for your child in the event of your unexpected death. Nobody anticipates a deadly accident or a sudden situation in which there is a need for another
Read more