What Property Can I Keep if I File for Chapter 7 Bankruptcy?

If you are thinking about filing for Chapter 7 bankruptcy, you likely know that this is a type of liquidation bankruptcy. What this means is that all non-exempt assets will be liquidated, and the money obtained from the liquidation of those assets will be used to repay creditors in order of their priority. Chapter 13 bankruptcy does not involve the liquidation of a debtor’s assets. When you are planning to file for Chapter 7 bankruptcy, you may be wondering: what property will I be able to keep if I file for liquidation bankruptcy? The good news is that Illinois law contains a variety of bankruptcy exemptions that can allow debtors to retain a wide range of assets even during and after a Chapter 7 bankruptcy case. Consider the following information from our Oak Park bankruptcy attorneys.

You Will Need to Use Illinois’s Bankruptcy Exemptions

The first thing to know when you are learning about which assets of yours will qualify for exemptions in your Oak Park bankruptcy case is that debtors in Illinois must use Illinois bankruptcy exemptions as opposed to federal exemptions. There are some states that permit debtors to choose between using the federal exemptions and the state exemptions, but Illinois is not one of those states. Accordingly, you will want to pay attention to the specific bankruptcy exemptions identified in the Illinois Compiled Statutes.

Homestead Exemption

Illinois has a homestead exemption of $15,000. What this means is that you can exempt up to $15,000 of equity in your home. Your home can include a house, a condominium, a cooperative, a mobile home, and other types of residential units.

Personal Property Exemptions

There are a variety of personal property exemptions under Illinois law. You can exempt up to $2,400 in a single motor vehicle. You will also have a “wildcard” exemption of $4,000, which you can use to exempt multiple assets of lesser value or a single asset that is worth $4,000. In addition, you will be able to exempt clothes you need to wear, family photos, school books, health aids, tuition trust funds, and other personal property.

Benefits Exemptions

Many different kinds of benefits are exempt when you file for Chapter 7 bankruptcy. For example, insurance benefits are exempt, as are pensions and retirement benefits. Public assistance benefits are also exempt, as are unemployment benefits and workers’ compensation benefits, as well as veteran’s benefits.

Contact a Bankruptcy Lawyer in Oak Park

The exemptions listed above are just some examples of the exemptions available under Illinois law. It will be extremely important for you to work with an Oak Park bankruptcy attorney who can go over the details of your bankruptcy case with you and help you to determine with certainty which assets are likely to be exempt. Some of the exemptions can be complicated, but a bankruptcy lawyer can look at your assets and identify those that will likely qualify as exempt under Illinois law. Contact the Emerson Law Firm today to learn more about Illinois bankruptcy exemptions and to get started on your Chapter 7 bankruptcy case.


See Related Blog Posts:

How Does Consumer Debt Collection Work?

How Does Bankruptcy Impact Foreclosures and Evictions?

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