Benefits You Receive and Your Consumer Bankruptcy Case

Making the decision to file for bankruptcy can be difficult, especially if you are planning to file for Chapter 7 bankruptcy and trying to determine which of your assets will need to be liquidated in order to be eligible for a bankruptcy discharge. If you are considering Chapter 7 bankruptcy or any type of consumer bankruptcy, you may know that specific bankruptcy exemptions allow debtors to exempt certain assets. In a Chapter 7 bankruptcy case, exempt assets are not liquidated, and the debtor can keep those assets while remaining eligible for a discharge of their debts. In a Chapter 13 bankruptcy case, the fact that an asset is exempt does not mean that a debtor can keep the asset (because debtors do not have to give up assets in a Chapter 13 case), but rather that the value of an exempt asset does not have to be considered in the debtor’s repayment plan.

Many debtors in Illinois receive some type of benefit, and some debtors receive multiple types of benefits from the government. How are these assets treated in a bankruptcy case? Our Oak Park consumer bankruptcy attorneys can tell you more about benefits and personal bankruptcy.

What are Public or Government Benefits?

There are many different types of public or government benefits that a person might be receiving depending upon their work history, their income level, the value of their assets, and whether they are disabled. Some of the most common examples of benefits that people in Illinois may be receiving include but are not limited to the following:
  • Social Security benefits;
  • Social Security Disability Insurance (SSDI) payments;
  • Supplemental Security Income (SSI) payments;
  • Veterans’ benefits;
  • Medicare benefits;
  • Medicaid benefits;
  • Supplemental Nutrition Assistance Program (SNAP) benefits;
  • Federal Emergency Management Act (FEMA) assistance;
  • Railroad retirement benefits;
  • Foreign Service retirement benefits;
  • Civil Service Retirement System (CSRS) benefits; and
  • Longshore and Harbor Workers’ Compensation Act (LHWCA) benefits.
You may receive other types of public or federal government benefits, as well. If you have questions about the classification of certain benefits you receive, you should seek advice from a bankruptcy lawyer.

Most Benefits are Entirely Exempt

You should anticipate that any public or government benefits will be entirely exempt in a bankruptcy case under Illinois law. In addition, most other types of retirement benefits will also be exempt, but you should discuss specific retirement programs with your bankruptcy lawyer before you assume that those assets will be exempt in your bankruptcy case. Unemployment benefits are also exempt under Illinois law, along with workers’ compensation benefits.

Contact an Oak Park Bankruptcy Lawyer Today

The consumer bankruptcy process can be extremely complicated, but one of our experienced Oak Park bankruptcy attorneys can assist you. Whether you have questions about particular assets and exemptions in Illinois or you need assistance with another aspect of the bankruptcy process, our firm is here to help. We have years of experience serving clients in Oak Park, and we can speak with you today about your circumstances. Contact the Emerson Law Firm for more information.



See Related Blog Posts:

How Much Debt is Enough to File for Bankruptcy?

Hospital Credit Card Debt: What to Know




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