Illinois Bankruptcy Laws
Federal and state laws protect the process of going through bankruptcy. These laws differ by state and can be quite complex. Before you decide to file bankruptcy, be sure you have all the information about how the laws in your state will affect you. Speak with a local bankruptcy attorney to get answers. Complete the free form below to get a free case evaluation with a lawyer in your area.
If you are struggling with a debt load that you simply cannot handle, Illinois bankruptcy laws may offer you a way to deal with your existing debt and start over financially. Before you file for bankruptcy in Illinois, take the time to learn about the current laws and how they affect your financial situation.
Illinois Bankruptcy Exemptions
All states have bankruptcy laws that protect certain assets an individual owns. In other words, under bankruptcy law, exempted property cannot be seized and sold to pay back creditors. In Illinois, the following items are exempt:
- Up to $15,000 in equity in your home
- Up to $2,400 in equity in your car
- Public benefits
- School books
- Retirement plan
- Life insurance proceeds
- Up to $1,500 for books and tools of the trade
- Family Bible
- Family photos
- Up to $15,000 in personal injury recoveries
- Wrongful death recoveries
- Child support and alimony
- Business partnership property
- Up to $4,000 in any other personal property
- Health aids
In equity-building properties, like a home or car, you may have to buy back a portion of your equity if you have earned more than the value of the exemption. For instance, if you have more than $2,400 in equity in your vehicle, you will have to pay the court the difference if you wish to keep your car.
Illinois Chapter 7 Bankruptcy Law
Debtors who pass the means test, which means they are at or below the median income level in their state, can file Chapter 7 bankruptcy. Under this form of bankruptcy protection, in most cases, most debts are eradicated after all non-exempt assets are sold. However, certain debts, like tax liens and alimony or child support payments, cannot be done away with, even under Chapter 7 bankruptcy.
Illinois Chapter 13 Bankruptcy Law
Those interested in protecting property that has a loan on it, such as a mortgage or vehicle, or have large amounts of debts that cannot be wiped out, may receive more financial benefit from Chapter 13 bankruptcy. Under this form of bankruptcy, debts are restructured with the court’s supervision, and the debtor attempts to pay them with court protection against predatory collections actions. Those who cannot file Chapter 7 must file Chapter 13.
Start a Free Case Evaluation Right Now!