Will I Have to Give Up My Smartphone and Laptop if I File for Bankruptcy?
Considering the possibility of consumer bankruptcy can be stressful for many Americans, particularly given the varied bankruptcy myths in circulation. From unintentional misinformation provided by friends or family members to information that may be aimed at deceiving consumers on the internet, there are so many misconceptions about losing assets and personal property if you decide to file for bankruptcy. One frequent source of anxiety in this regard concerns technology assets that people have become accustomed to using—and often need for work or school—in their day-to-day lives, such as smartphones and laptop computers.
You should know up front that Illinois bankruptcy exemptions exist that you can rely on to avoid having necessary property liquidated, including your smartphone or laptop. At the same time, we want to emphasize that asset liquidation might not even be an issue you have to consider based on the type of bankruptcy you are considering. Our Oak Park bankruptcy attorneys are here to tell you more and to assist with your personal bankruptcy case.
You Might Not Even Need to Worry About Asset Liquidation
We often receive questions from consumers about asset liquidation in consumer bankruptcy cases and fears about losing all of their property. We want to be clear that only one type of consumer bankruptcy involves asset liquidation — Chapter 7 bankruptcy. Even if you do file for Chapter 7 bankruptcy, it is important to understand that you will not lose all of your assets, but we will say more about that shortly.
For other types of consumer bankruptcy—usually Chapter 13 bankruptcy is the other commonly filed form of personal bankruptcy, but Chapter 11 might be used in certain circumstances—assets are not liquidated. These types of bankruptcy are reorganization bankruptcies and not liquidation bankruptcies. Accordingly, in a Chapter 13 (or Chapter 11) bankruptcy, debt is reorganized and the debtor makes payments based on the terms of a three-to-five year repayment plan, after which time remaining eligible debt is discharged. Bankruptcy exemptions, which we will discuss in more detail momentarily, are only used to determine the amount for the repayment plan and not to determine what assets must be liquidated. To be clear, assets will not be liquidated in a reorganization bankruptcy.
You Can Use Exemptions to Keep Your Smartphone and Laptop in a Chapter 7 Bankruptcy Case
Even if you do file for Chapter 7 bankruptcy, which is a liquidation bankruptcy (meaning that some assets will be liquidated to repay creditors), you can use Illinois bankruptcy exemptions to keep various types of property.
Under Illinois law, many different kinds of personal property are exempt from liquidation. For smartphones and laptops, depending upon your job, you might be able to exempt these as tools of the trade, particularly your computer. But even if no other specific personal property exemptions apply, then you can still use the “wildcard exemption” under Illinois law that allows a debtor to exempt up to $4,000 of personal property for which there is no other applicable exemption.
Contact Our Bankruptcy Lawyers in Oak Park
Do you have questions about bankruptcy exemptions, or specific concerns about assets in your bankruptcy case? One of our experienced Oak Park bankruptcy lawyers can speak with you today. Contact the Emerson Law Firm for more information.
See Related Blog Posts:
“Spike” in Consumer Bankruptcy Filings May Occur Soon
If a Family Member Cosigned a Loan, Can I Still File for Bankruptcy?
You should know up front that Illinois bankruptcy exemptions exist that you can rely on to avoid having necessary property liquidated, including your smartphone or laptop. At the same time, we want to emphasize that asset liquidation might not even be an issue you have to consider based on the type of bankruptcy you are considering. Our Oak Park bankruptcy attorneys are here to tell you more and to assist with your personal bankruptcy case.
You Might Not Even Need to Worry About Asset Liquidation
We often receive questions from consumers about asset liquidation in consumer bankruptcy cases and fears about losing all of their property. We want to be clear that only one type of consumer bankruptcy involves asset liquidation — Chapter 7 bankruptcy. Even if you do file for Chapter 7 bankruptcy, it is important to understand that you will not lose all of your assets, but we will say more about that shortly.
For other types of consumer bankruptcy—usually Chapter 13 bankruptcy is the other commonly filed form of personal bankruptcy, but Chapter 11 might be used in certain circumstances—assets are not liquidated. These types of bankruptcy are reorganization bankruptcies and not liquidation bankruptcies. Accordingly, in a Chapter 13 (or Chapter 11) bankruptcy, debt is reorganized and the debtor makes payments based on the terms of a three-to-five year repayment plan, after which time remaining eligible debt is discharged. Bankruptcy exemptions, which we will discuss in more detail momentarily, are only used to determine the amount for the repayment plan and not to determine what assets must be liquidated. To be clear, assets will not be liquidated in a reorganization bankruptcy.
You Can Use Exemptions to Keep Your Smartphone and Laptop in a Chapter 7 Bankruptcy Case
Even if you do file for Chapter 7 bankruptcy, which is a liquidation bankruptcy (meaning that some assets will be liquidated to repay creditors), you can use Illinois bankruptcy exemptions to keep various types of property.
Under Illinois law, many different kinds of personal property are exempt from liquidation. For smartphones and laptops, depending upon your job, you might be able to exempt these as tools of the trade, particularly your computer. But even if no other specific personal property exemptions apply, then you can still use the “wildcard exemption” under Illinois law that allows a debtor to exempt up to $4,000 of personal property for which there is no other applicable exemption.
Contact Our Bankruptcy Lawyers in Oak Park
Do you have questions about bankruptcy exemptions, or specific concerns about assets in your bankruptcy case? One of our experienced Oak Park bankruptcy lawyers can speak with you today. Contact the Emerson Law Firm for more information.
See Related Blog Posts:
“Spike” in Consumer Bankruptcy Filings May Occur Soon
If a Family Member Cosigned a Loan, Can I Still File for Bankruptcy?
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