When filing for bankruptcy in Illinois, there are certain types and amounts of property or assets that can be protected against creditor claims. Homes, household goods, personal belongings, and financials accounts may all fall under state and federal exemption limits, allowing you to retain possession of these items in a Chapter 7 bankruptcy liquidation, and impacting repayment calculations in a Chapter 13 reorganization.
How Exemptions Apply to Bankruptcy in Illinois
Exemptions protect personal property and assets you own, so that they are not subject to creditor claims during bankruptcy proceedings. Rather than applying the rules on bankruptcy exemptions listed under Chapter 5 of the U.S. Bankruptcy Code, Illinois enacted legislation to ‘opt out’ of this system, instead relying on its own state laws in these matters. The type and amount of exemptions you are entitled to claim depends on the type of bankruptcy you file:
Chapter 7 Bankruptcy: As a debt liquidation for those who do not have a steady income that allows them to meet their debt obligations, this generally requires the surrender of secured credit items, such as cars, boats, or other property. You do have the option to reaffirm debts so they are not included in the liquidation, and you may take exemptions that allow you to keep non-secured items, such as your clothing, household furnishings, and other types of personal property.
Chapter 13 Bankruptcy: As a reorganization of your debts for those with a steady income but are having trouble meeting monthly obligations, Chapter 13 allows you to retain possession of secured property, such as homes or cars. These debts are restructured with payments spread out over the course of three to five years, and the value of the exemptions you claim can help to reduce the total amount you end up having to pay.
Illinois Bankruptcy Exemptions
The following are some of the exemptions listed under the Illinois Compiled Statutes (735 ILCS 5/12-1001) which, depending on the type of bankruptcy you file, you may be able to claim:
Homestead exemption up to $15,000 for a residence, such as a home, mobile home, or condominium, which is doubled for married couples;
These are just some of the exemptions you may be entitled to in your bankruptcy case. To discuss your situation and how bankruptcy exemptions apply to you, contact the dedicated Cook County bankruptcy attorneys at the Law Offices of Eric G.. Zelazny today. We will be happy to arrange a confidential case consultation with our experienced Illinois bankruptcy attorney in either our Tinley Park or Chicago office.