You may be concerned that filing for bankruptcy will result in the loss of all that you own. However, asset protection is available. One way to protect assets is to use exemptions, which are different in each state. If you are worried about asset protection in bankruptcy, you should consult the DuPage County asset protection lawyers at the Bankruptcy Center of Illinois.Asset Protection
In Illinois, you can protect your assets by using Illinois exemptions. Some states allow you to elect between the federal and state exemptions, but in Illinois, you are limited to taking Illinois exemptions.
In some cases, you will only be able to keep a certain amount of a protected asset. In other cases, you can protect the whole asset. There is a wildcard exemption that allows you to protect property not addressed by a specific exemption. Exemptions are handled differently under Chapter 7 and Chapter 13 bankruptcy.
Even if you cannot fully exempt an asset, the asset may be abandoned by a trustee if the value of the asset is not much more than the exemption amount. It is only considered worthwhile to sell an asset if the sale yields a sum that would allow creditors to be paid after the costs of the sale are recovered. You can keep an asset if it is abandoned by the trustee, as an asset protection attorney in DuPage County can explain.Illinois Exemptions
The homestead exemption allows you to protect equity in your home, whether it is a house, a mobile home, a condo, a cooperative, or a farm. You can exempt a maximum of $15,000 in equity in your home as an individual. If your spouse and you both have an ownership interest in the home, and you are filing jointly for bankruptcy, you can protect up to $30,000.
There are also many other important exemptions. You can exempt a maximum of 85% of your gross earnings or 45 times the federal minimum hourly wage each week, whichever is higher. You can also protect equity in your motor vehicle; in Illinois, you may exempt a maximum of $2,400 in your motor vehicle. When specific exemptions do not fully cover your personal property, you can use the wildcard exemption. This exemption is worth $4,000.
Additionally, you can exempt what you reasonably need for support and personal property, such as necessary clothes, family pictures, schoolbooks, prescribed health aids, prepaid tuition trust funds, and Illinois College Savings Pool accounts.Chapter 7 Bankruptcy
Chapter 7 bankruptcy requires a trustee to try to get creditors repaid as much as possible. To that end, your assets become part of a bankruptcy estate. The trustee is empowered to sell any non-exempt property and distribute the proceeds to creditors. The exemptions determine how much of an asset you can keep, and a DuPage County asset protection attorney can advise you on what to expect. Your equity in the property will dictate whether it is worth selling.Chapter 13 Bankruptcy
Chapter 13 bankruptcy allows you to keep your assets as long as you reorganize and repay your debts over a period of 3-5 years, according to a plan. Claims are priority, secured, or unsecured. Priority claims need to be paid in full. Secured debts must also be paid in full, or the collateral that secures them can be retaken. Unsecured debts do not need to be paid in full, although they should be addressed in the plan. The value of your non-exempt assets will dictate the amount that needs to be paid to unsecured creditors. Your non-exempt assets are not sold to repay creditors. Instead, you will need to pay creditors what cannot be exempted through your plan.Consult a Seasoned DuPage County Attorney
You might assume that you will lose property by filing for bankruptcy. This is not always the case. You can protect certain assets, and you should discuss your situation with a seasoned asset protection lawyer in DuPage County. We may be able to help you achieve relief from your debts while preserving as much as possible. Call us at (773) 993-0024 or contact us via our online form.