Oak Park Real Estate & Estate Planning Blog

What are exemptions in bankruptcy cases? If you are considering bankruptcy, you should first learn about how exemptions work. Under the Bankruptcy Code, exemptions allow debtors to be “exempt from property of the estate,” which means that debtors can exempt the value of certain assets from the bankruptcy estate. Exemptions work differently in Chapter 7 and Chapter 13 cases for individuals. In Chapter 7 cases, exemptions allow debtors to exempt assets from the estate for liquidation (in other words, you can keep the exempt property). According to the American Bankruptcy Institute (ABI), a majority of Americans who file for bankruptcy are able to exempt all or nearly all of their property in a Chapter 7 bankruptcy case. In a Chapter 13 case, given that assets are not liquidated, exemptions play a role in determining the monthly and total amount of debt that must be repaid over the course of the bankruptcy case. Some bankruptcy exemptions are used more frequently than others, so it is i...

The term “exemption” is extremely important for any individual or married couple considering bankruptcy and is particularly important in Chapter 7 bankruptcy cases since exemptions allow debtors to exempt assets from liquidation. If you own a home in the Oak Park area and you are considering bankruptcy, it will be essential for you to learn more about the homestead exemption and how it works in Illinois. While the term “homestead” might seem old-fashioned or inapplicable to any assets you might currently own, the term actually refers to your primary residence (such as your home or your condominium). How does the homestead exemption work under Illinois law ? Our Oak Park bankruptcy attorneys can explain. Homestead Exemption Generally The general point of a homestead exemption is to allow a debtor to exempt a certain amount of equity or interest they have in their primary residence. Each state has its own homestead exemption. Some states permit debtors who are filing for bankruptcy to c...

If you are thinking about filing for bankruptcy in the Oak Park area, it is important to know that certain kinds of debts cannot be discharged in a bankruptcy case. Under U.S. bankruptcy law, these are known as non-dischargeable debts, or exceptions to discharge. There are certain types of debts that have long been identified clearly as non-dischargeable debts, while there are misconceptions about other types of debts that may or may not be dischargeable. As an article in CNBC discusses, the U.S. Supreme Court recently issued a ruling in the case of Bartenwerfer v. Buckley , which clarifies that debts incurred due to another party’s fraud cannot be discharged in an individual’s bankruptcy case. Our Oak Park bankruptcy attorneys can explain the Court’s recent ruling and provide you with additional information on dischargeable and non-dischargeable debts. Supreme Court Says Debt Incurred Due to Another’s Fraud is Non-Dischargeable The recent Bartenwerfer case involved a debtor attempti...

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. Ho...

Bankruptcy exemptions are extremely important in any consumer bankruptcy proceeding. In a Chapter 7 bankruptcy case, which is a liquidation bankruptcy, it is important to know that bankruptcy exemptions allow a debtor to keep various assets so that they are not liquidated. To be clear, any assets that are exempt do not need to be sold, and the debtor can keep them while still receiving a discharge of eligible debts. In a Chapter 13 bankruptcy case or another type of reorganization bankruptcy, exemptions are used to determine the amount of debt that the individual debtor must repay over the course of the repayment plan. If you are considering filing for bankruptcy in Illinois, especially if you are planning to file for Chapter 7 bankruptcy, you may have started looking into bankruptcy exemptions to determine how they are likely to apply to your case. Yet it can be confusing to find that there are both federal bankruptcy exemptions and state bankruptcy exemptions. You may be wondering: ...

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 deb...

Are you thinking about filing for consumer bankruptcy in the Oak Park area? If so, you are likely speaking with close friends or family members about the process, and you are likely searching for information about personal bankruptcy on the internet. In your discussions and web browsing research, you have likely come across information about debts that are non-dischargeable, or debts that fall into the category of “exceptions to discharge” under U.S. bankruptcy law . It is important to keep in mind that the most common types are usually dischargeable in a bankruptcy case, but it is nonetheless essential to determine whether you will be able to have your debts discharged in your bankruptcy case. What are exceptions to discharge? The following are five things you should know. 1. Exceptions to Discharge Means Non-Dischargeable Debts Under the U.S. Bankruptcy Code, the term “exceptions to discharge” refers to debts that are non-dischargeable in a bankruptcy case. The law lists 19 exceptio...

If you are planning to file for bankruptcy in Oak Park , you may already know about the importance of bankruptcy exemptions. For debtors who are planning to file for Chapter 7 bankruptcy, the significance of bankruptcy exemptions can be quite obvious: any property that is exempt through Illinois’s bankruptcy exemptions will not be liquidated as part of the bankruptcy case, and the debtor can keep that property while receiving a discharge of eligible debt. To be sure, many people assume that a Chapter 7 bankruptcy results in the loss of all property or assets, but this is a common bankruptcy myth. Bankruptcy exemptions available under Illinois law allow debtors to keep a wide range of assets, from equity in a home or motor vehicle to pensions and retirement accounts. Yet you might be wondering what role bankruptcy exemptions play in a Chapter 13 bankruptcy case, or if you need to consider the exemptions at all since you did not think Chapter 13 bankruptcy involved the liquidation of an...

Bankruptcy exemptions are important in both Chapter 7 and Chapter 13 consumer bankruptcy cases. While you might already know about some bankruptcy exemptions in Illinois such as the homestead exemption or automobile exemption, there are a wide range of bankruptcy exemptions that could be applicable to your case. Our Oak Park bankruptcy lawyers want to provide you with more information about some of the less common bankruptcy exemptions that exist in Illinois that could help with your case. How Bankruptcy Exemptions Work in Consumer Cases Before we discuss some of the less common bankruptcy exemptions that are important for you to know and consider, we want to make sure you understand how these exemptions work. In a Chapter 7 bankruptcy case involving consumer debt, exemptions allow the individual or married couple filing for bankruptcy to exempt certain assets from liquidation. Since Chapter 7 bankruptcy is a type of liquidation bankruptcy, all non-exempt assets will be liquidated so...

Struggling with immense debt can be extremely anxiety-inducing and difficult for individuals and families in the Oak Park area, and debt problems can be especially complicated when you are worried you may be at risk of losing your home. While homeowners had certain mortgage forbearance options in the earlier months of the pandemic, many protections have since expired, and many debtors are struggling to pay their bills while fearing that they could lose their family house. Are there options for keeping your house in a consumer bankruptcy case? In both Chapter 7 bankruptcy and Chapter 13 bankruptcy, there are options for keeping your home, but Chapter 13 bankruptcy specifically can stop a foreclosure and allow you to get back on track with mortgage payments. Our Oak Park bankruptcy attorneys can say more. File for Chapter 7 Bankruptcy and Reaffirm Your Mortgage Debt Chapter 7 bankruptcy is a type of liquidation bankruptcy, which means that the bankruptcy process will involve liquidatin...

If you recently received an inheritance, or if you know you may be receiving an inheritance soon, you should know that it may impact your Chapter 13 bankruptcy case . Yet the way an inheritance will affect a Chapter 13 bankruptcy case is much different than how it will affect a Chapter 7 bankruptcy case. In Chapter 7 cases, courts need to know about all assets to properly classify them as exempt or non-exempt, and non-exempt assets will be liquidated in order to repay creditors and to discharge debts. In Chapter 13 cases, assets also must be properly classified as exempt or non-exempt, but assets are not liquidated. Instead, whether or not assets are exempt will affect the debtor’s Chapter 13 debt reorganization and the repayment plan. Given the ways in which exempt and non-exempt assets are relevant to a Chapter 13 bankruptcy case, you may not be surprised to learn that an inheritance will not be distributed immediately to creditors the way it would in a Chapter 7 case. Instead, an i...

If you are planning to file for Chapter 7 bankruptcy , you want to be certain that all—or at least the majority of—the major debts you owe will be discharged in your bankruptcy case. Accordingly, you might be wondering: will Chapter 7 bankruptcy erase all of the debt I owe? To confirm an answer to this question, it is critical to discuss the particular facts of your case with an Oak Park consumer bankruptcy lawyer who can help. Bankruptcy laws in the U.S. are extremely complicated, and there are some types of debt that are not dischargeable. As such, it is important to have an experienced attorney assess your situation before you move forward with your bankruptcy case. The good news is that most consumer debts are dischargeable in a Chapter 7 bankruptcy case, which means that you may indeed be able to erase all of the debt you owe. Yet some types of debt are not dischargeable, and there are some situations in which debt ultimately cannot be discharged even if the type of debt is dis...

There are so many different misconceptions about bankruptcy on the internet, and these myths also circulate among friends, family members, co-workers, and other acquaintances. One of the most common misconceptions about bankruptcy we hear is that filing for bankruptcy means you will lose all of your assets and will be left with nothing in order to have your debts discharged. This is simply untrue, and it is critical to understand how different types of bankruptcy affect liquidation, and how bankruptcy exemptions can always allow debtors to protect certain types of property. Our bankruptcy attorneys in Oak Park are here to tell you more. Liquidation Bankruptcy Does Not Mean You Will Lose All of Your Property First, we want to clarify that, even in a liquidation bankruptcy, you will not lose all of your property. Under U.S. bankruptcy law , Chapter 7 bankruptcy is a type of liquidation bankruptcy, and it does result in non-exempt property being liquidated in order for the debtor to ...

When you owe a significant amount of debt and you do not have options for paying it off, consumer bankruptcy could make a lot of sense for you. However, you likely have concerns about how certain types of property will be handled in your bankruptcy case, and whether you will lose property that you need. For example, if you rely on your car to get to work and to run errands such as going to the grocery store or picking your kids up from school, the prospect of losing your car can be devastating. As such, you may be wondering, “Can I keep my car if I file for personal bankruptcy?” The answer to that question may not be the same for everyone, and it will depend upon your particular circumstances. However, we want to be clear that you certainly may be able to keep your car if you file for personal bankruptcy , and we will explain how that can work. You Will Not Lose Your Car if You are Filing for Chapter 13 Bankruptcy First, if you are filing for Chapter 13 bankruptcy, you should know t...

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 ...

If you are considering consumer bankruptcy , then you may be wondering how a personal bankruptcy filing will impact the belongings you currently have. For example, will you be able to keep your house, or does all of the equity in your home need to be turned over to the bankruptcy trustee? Can you keep your motor vehicle? How do bankruptcy courts handle property that has sentimental value, such as family photos or jewelry that you consider to be a family heirloom? The amount and kind of property that you will be able to keep if you file for bankruptcy depends upon the type of bankruptcy you are filing for, and then it depends upon the kind of property you have and want to retain according to Illinois’s bankruptcy exemptions. Let us explain in more detail. If You File for Chapter 13 Bankruptcy If you are planning to file for Chapter 13 bankruptcy, you should know immediately that this is not a liquidation bankruptcy. To be clear, you will not need to liquidate your property up front i...

If you are struggling with debt and are thinking about filing for consumer bankruptcy , you probably have many questions about how liquidation bankruptcy and reorganization bankruptcy work. In particular, consumers often want to know if they will be able to keep a particular piece of property if they file for Chapter 7 bankruptcy since this is a liquidation bankruptcy. In other words, many consumers hear that, with a liquidation bankruptcy, all property will get liquidated in order to repay creditors. When a debtor files for bankruptcy in Illinois, that person is allowed to keep certain property even with a liquidation bankruptcy. These are known as “exemptions.” There are both federal and state exemptions, but anyone who files for bankruptcy in Illinois must use the Illinois exemptions. When it comes to exemptions and what type of property you can keep, we know that many debtors want to know, “Can I keep my car if I file for bankruptcy?” The answer to this question depends on sever...

If you obtain a settlement after filing a personal injury lawsuit, is that settlement protected in consumer bankruptcy ? Under the U.S. Bankruptcy Code, settlements are considered to be a type of property. Accordingly, if you are filing for Chapter 7 bankruptcy , any money you obtain from a settlement is going to be considered property of the estate and subject to liquidation unless it is exempt. We want to explain more about personal injury settlements and discuss a recent case concerning an NFL player’s settlement for brain damage and chronic traumatic encephalopathy (CTE) as a result of sustaining concussions while playing football. The recent case suggests that bankruptcy courts may be open to expanding personal injury settlement exemptions in certain cases. How Personal Injury Settlements can Qualify for an Exemption in Illinois Exemptions allow a debtor to retain certain property in the event of bankruptcy. This means that any exempt property will not be liquidated in order t...

If you are thinking about filing for consumer bankruptcy in Oak Park, Illinois , it is important to know what property you will be able to exempt if you are planning to file for liquidation bankruptcy. Many debtors choose to file for Chapter 7 bankruptcy , which is a liquidation bankruptcy. Given that this type of bankruptcy allows debtors to get a fresh start relatively quickly, it is often preferable. Assuming that you are eligible for Chapter 7 bankruptcy—you will need to be able to pass the “means test” in order to be eligible—all of your property that is not exempt will be liquidated in order to repay creditors. Running a quick internet search for bankruptcy exemptions is likely to result in information about both federal bankruptcy exemptions and state bankruptcy exemptions. We want to provide you with more information about how exemptions work in an Illinois bankruptcy and to be clear about the exemptions you can use: Illinois residents filing for bankruptcy must use Illin...

When a debtor in Oak Park files for consumer bankruptcy , there are many steps that are necessary to complete in the filing process as well as throughout the bankruptcy case. Bankruptcy forms and document requirements can be extremely complicated, and many debtors who attempt to file for Chapter 7 bankruptcy or Chapter 13 bankruptcy on their own make errors in the paperwork. For example, debtors almost always need to provide tax returns, income documentation that might include W-2s or self-employment forms, proof of real estate owned and its current market value, proof of vehicles owned and the remaining amount owed, information about bank accounts and retirement accounts, documentation of child support or alimony paid or received, and many other materials. When you file for bankruptcy, you also need to disclose any and all assets that are exempt. In a consumer bankruptcy case, certain assets are exempt. Exempt assets cannot be liquidated in order to repay creditors—the deb...