Frequently Asked Questions About Bankruptcy Exemptions
When you are making plans to file for consumer bankruptcy, and Chapter 7 bankruptcy in particular, we know that you likely have a wide variety of questions about how bankruptcy exemptions work. In any personal bankruptcy case, it is critical to work with an experienced Illinois bankruptcy lawyer who can ensure that you take advantage of the variety of bankruptcy exemptions that may be available to you. In the meantime, however, we want to provide you with some frequently asked questions, and helpful answers, about exemptions in Chicago-area bankruptcy cases.
What are Bankruptcy Exemptions?
Bankruptcy exemptions allow debtors to protect certain property in a bankruptcy case. Exempt assets will not be considered for liquidation in a Chapter 7 case or as part of the repayment terms in a Chapter 13 case, according to U.S. bankruptcy law.
Can I Choose Between Federal and Illinois State Bankruptcy Exemptions?
There are both federal and state exemptions, but Illinois is one of a number of states that requires debtors to use Illinois bankruptcy exemptions. Accordingly, you will need to work with your bankruptcy lawyer to determine which of your assets are exempt under Illinois law.
Can I Exempt My Entire House?
It depends, but most likely not. Under Illinois law, the homestead exemption (which is the exemption for your house or for equity in your house) is only $15,000. As such, you can exempt up to $15,000 equity in your home, but not more than that in most circumstances.
Will I be Able to Keep Items That Have Sentimental Value?
Again, it depends. If an item also has market value, you will likely need to determine whether there is a specific exemption, or whether you may be able to retain certain items with sentimental value through the Illinois wildcard exemption.
What Type of Property is Exempt?
There are a wide variety of types of property that are exempt. Some types of property are exempt entirely (such as pensions), while other types of property are exempt up to a certain amount. Since there are so many different exemptions, it is critical to seek help determining your exemptions from a bankruptcy lawyer.
Do Bankruptcy Exemptions Work the Same Way in Chapter 7 and Chapter 13 Bankruptcy Case?
Not exactly. In a Chapter 7 bankruptcy case, all non-exempt property will be liquidated (i.e., sold) in order to repay your creditors. As such, exempt property is the property that you will be able to keep. Differently, in a Chapter 13 bankruptcy case, the value of all non-exempt property is the amount that you will need to repay over a period of three to five years as part of your repayment plan. What this means is that, in a Chapter 13 case, your non-exempt property will not be liquidated as it is in a Chapter 7 case, but rather, you will be responsible for paying your unsecured creditors the amount owed on non-exempt property over the period of your repayment plan terms.
Contact an Oak Park Bankruptcy Attorney
Bankruptcy exemptions are incredibly important for debtors in Illinois, but it can be difficult to determine precisely how they can work for you. This is especially true when you have certain types of property that can be difficult to place a market value on. If you have questions or concerns about exemptions in your bankruptcy case, you should seek advice from an experienced Oak Park bankruptcy attorney as soon as possible. Contact the Emerson Law Firm today to speak with a dedicated consumer protection advocate about your situation.
See Related Blog Posts:
Things You Should Not Do Before You File for Bankruptcy
Can I Purchase or Sell Real Property During a Chapter 13 Bankruptcy Case?
What are Bankruptcy Exemptions?
Bankruptcy exemptions allow debtors to protect certain property in a bankruptcy case. Exempt assets will not be considered for liquidation in a Chapter 7 case or as part of the repayment terms in a Chapter 13 case, according to U.S. bankruptcy law.
Can I Choose Between Federal and Illinois State Bankruptcy Exemptions?
There are both federal and state exemptions, but Illinois is one of a number of states that requires debtors to use Illinois bankruptcy exemptions. Accordingly, you will need to work with your bankruptcy lawyer to determine which of your assets are exempt under Illinois law.
Can I Exempt My Entire House?
It depends, but most likely not. Under Illinois law, the homestead exemption (which is the exemption for your house or for equity in your house) is only $15,000. As such, you can exempt up to $15,000 equity in your home, but not more than that in most circumstances.
Will I be Able to Keep Items That Have Sentimental Value?
Again, it depends. If an item also has market value, you will likely need to determine whether there is a specific exemption, or whether you may be able to retain certain items with sentimental value through the Illinois wildcard exemption.
What Type of Property is Exempt?
There are a wide variety of types of property that are exempt. Some types of property are exempt entirely (such as pensions), while other types of property are exempt up to a certain amount. Since there are so many different exemptions, it is critical to seek help determining your exemptions from a bankruptcy lawyer.
Do Bankruptcy Exemptions Work the Same Way in Chapter 7 and Chapter 13 Bankruptcy Case?
Not exactly. In a Chapter 7 bankruptcy case, all non-exempt property will be liquidated (i.e., sold) in order to repay your creditors. As such, exempt property is the property that you will be able to keep. Differently, in a Chapter 13 bankruptcy case, the value of all non-exempt property is the amount that you will need to repay over a period of three to five years as part of your repayment plan. What this means is that, in a Chapter 13 case, your non-exempt property will not be liquidated as it is in a Chapter 7 case, but rather, you will be responsible for paying your unsecured creditors the amount owed on non-exempt property over the period of your repayment plan terms.
Contact an Oak Park Bankruptcy Attorney
Bankruptcy exemptions are incredibly important for debtors in Illinois, but it can be difficult to determine precisely how they can work for you. This is especially true when you have certain types of property that can be difficult to place a market value on. If you have questions or concerns about exemptions in your bankruptcy case, you should seek advice from an experienced Oak Park bankruptcy attorney as soon as possible. Contact the Emerson Law Firm today to speak with a dedicated consumer protection advocate about your situation.
See Related Blog Posts:
Things You Should Not Do Before You File for Bankruptcy
Can I Purchase or Sell Real Property During a Chapter 13 Bankruptcy Case?
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