How to Keep Your Property in a Consumer Bankruptcy Case

For many people who are considering a personal bankruptcy case, there is a looming question: how can I keep my property? Indeed, many debtors thinking about bankruptcy wait too long to file because they are concerned about their assets being fully liquidated and losing most of their important property. It is important to know that there are multiple ways to keep your property when you file for bankruptcy — either through the type of bankruptcy you file for or by applying exemptions to your assets. Our Oak Park bankruptcy attorneys can explain in more detail.

Determine Your Eligibility for Chapter 13 Bankruptcy

The easiest way to keep your property — all of your property — in a bankruptcy case is by filing for Chapter 13 bankruptcy (or another type of reorganization bankruptcy). In a Chapter 13 bankruptcy, none of your assets are liquidated. Given that this is a type of reorganization bankruptcy, you will need to plan to make set monthly payments as part of a repayment plan to creditors for a period of three to five years (based on the details of your reorganization plan). To be eligible for Chapter 13 bankruptcy, you will need to have proof that you have a steady income that will allow you to make regular payments on your plan, and you will have to have debts below the limit. The current limit in 2023 is $2,750,000 in combined secured and unsecured debt.

Learn How Exemptions Work in a Chapter 7 Bankruptcy Case

Under Illinois law, there are many different bankruptcy exemptions that apply to consumer bankruptcy cases. Bankruptcy exemptions are used in both Chapter 13 and Chapter 7 bankruptcy cases for different purposes. When it comes to keeping property in a liquidation bankruptcy, exemptions allow the debtor to keep any assets that are exempt. To be clear, exempt assets will not be subject to liquidation, and the debtor will get to keep those assets. Given the number of exemptions, you should always speak with a bankruptcy lawyer about the specific exemptions that are likely to apply to your case. The following are examples of some of the most commonly used exemptions in Illinois consumer bankruptcy cases:
  • Homestead exemption (up to $15,000 in a residence);
  • Motor vehicle exemption (up to $2,400 equity);
  • Wildcard exemption ($4,000 worth of assets of your choosing other than real estate);
  • Alimony and child support;
  • Burial funds;
  • Personal injury awards;
  • Retirement benefits and pensions;
  • Various types of personal property, such as school books, necessary apparel, family photos, and more;
  • Trade implements, such as books or tools you need to do your job; and
  • 85% of your gross wages.
Contact a Bankruptcy Attorney in Oak Park

As you can see, you can file for bankruptcy and keep at least some — or even all — of your property, depending on the type of bankruptcy you are planning to file. When you are considering a Chapter 7 bankruptcy case and want to find out more about keeping your assets with exemptions, our firm can help. Do not hesitate to get in touch with one of the experienced Oak Park bankruptcy attorneys at our firm. Contact the Emerson Law Firm today to learn more about the services we provide.



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