What are my options for personal bankruptcy in Illinois?

In Illinois, a debtor may file for personal bankruptcy under either Chapter 7 or Chapter 13. Chapter 7 is known as the liquidation bankruptcy where non-exempt assets are sold and the proceeds distributed to creditors. Under Chapter 7, most debts are forgiven and the debtor is allowed a "fresh start." Chapter 13 is the debt restructure bankruptcy that allows a debtor to retain his or her assets while setting up a plan for repayment to the creditors. It is mandatory before filing for Chapter 13 that the debtor has sufficient income after necessary bills are paid to fund the repayment plan. Under Chapter 13, secured debt must not exceed $1,010,650 and unsecured debt must not be greater than $336,900. With any bankruptcy, there is an exchange: a new financial beginning but a diminishment in purchasing power.

Illinois Chapter 7 Bankruptcy Exemptions

Illinois allows those filing bankruptcy to retain some assets from liquidation. These assets are considered non-exempt. Below is a partial list of assets an Illinois debtor is allowed to keep:

Homestead

Real estate including: farm, lot with building, mobile home, condominium, etc. up to $7500-proceeds of any sale are exempt for a year-also if a spouse dies or deserts up to the same amount.  If married, the amount doubles

Personal property

Bible, photos, schoolbooks, clothing, health aids, old car worth no more than $1200, personal injury compensation up to $7500, proceeds of exempt property, title of boat over 12 feet, wrong death needed for living expenses,

Insurance

Fraternal and society benefits, life insurance benefits for dependents,  life insurance benefits that are under contract to not be paid to creditors,

Misc.

Partnership business property, alimony and child support

Pensions

Civil service and county employees, firefighters pension for disabled firefighters, their widows and children, qualifying ERISA, general assembly members, prison employees, judges, public employees, state employees, etc.

Public Benefits

Government aid, compensation for crime victims, Social Security, Restitution for  WWII relocation, unemployment, veteran’s benefits, workmen’s comp,  occupational and disease compensation

Tools of Trade

Books and tools up to $750

If you are considering filing for personal bankruptcy in Illinois, talk with an experienced attorney to find out more about bankruptcy chapter 7 exempt property.