If you are filing for bankruptcy in Illinois, the law allows you to keep certain personal property, excluding them from the bankruptcy. In a chapter 7 bankruptcy, property that is not exempt is sold by the trustee who will then use the proceeds to pay off the filer’s debt.
When someone is considering bankruptcy, it is helpful to have a general idea of what property is exempt for planning purposes – working with an experienced bankruptcy attorney can provide individuals and families with detailed information on where they stand.
Many start by wondering what will happen to their home, automobile and personal effects such as furniture and clothing – the basics for starting anew for many. In a chapter 7 bankruptcy, exempt property in these categories may include:
- Homestead exemptions of up to 15K in equity in a residential home, mobile home, condo; double for joint filers
- Up to 2.4K in one motor vehicle
- A wildcard exemption up to 4k
- Miscellaneous personal property such as clothing, prescribed health aids and the like
Many individuals and families have small businesses or work in a trade. Business related exemptions may include:
- Partnership Property
- Franchise, Permit, and License Interests including liquor permits
- Trade Implements up to $1,500
Income as well as other payments or benefits that a filer depends on may not be exempt from bankruptcy, but there are some exemptions that may provide needed funds when considering bankruptcy:
- Life insurance, annuity proceeds, or cash value if the beneficiary is insured’s child, parent, spouse, or another dependent
- Life insurance proceeds to a spouse or dependent to the extent needed for support
- Health, disability, or unemployment benefits
- Payments made to filer relating to a wrongful death claim or personal injury settlement up to allowed amount
- Pension and Retirement Benefits
- Public Assistance
- Unemployment Compensation
- A percentage of wages earned
- Worker’s Compensation
- Veteran’s Benefits
- Crime Victim Compensation
Many worry about being able to continue paying their child support obligation if they decide to file for bankruptcy. Under bankruptcy law, child support and spousal maintenance obligations must continue uninterrupted for the benefit of children and are therefore exempt in chapter 7 bankruptcy.
Every situation is unique. It is very important to work with an experienced bankruptcy lawyer who can guide you through the bankruptcy process, providing needed information for you to decide if bankruptcy protection is a good strategy for your financial situation. Contact the Peoria bankruptcy law office of Charles E Covey for your free consultation at 309-674-8125.