Millions of Americans are dealing with high levels of unsecured debt. Though Chapter 7 bankruptcy is a viable option for most, many are afraid they’ll lose valuable assets by filing. The court-appointed trustee can sell certain assets to repay creditors, but they’re limited to non-exempt assets. In this guide, you will learn which assets are protected in Chapter 7. Your
Home
In the state of Illinois, a married debtor may exempt home equity up to $30,000. There’s a big difference between home equity and market value. Though a home may be worth hundreds of thousands of dollars, unless you’ve lived in it for over a decade, you likely have little equity. In a tenancy by the entirety situation, ownership is joint, not separate. Under the state’s laws, creditors can’t take joint assets to pay an individual owner’s debts.
Your Retirement Accounts
The state’s Supreme Court affirmed that retirement accounts are exempt, no matter their value. The rule applies to pension plans, IRAs, and 401(k)s. This bankruptcy exemption is important because most retirement accounts have emotional equity that exceeds their financial value. Before increasing your contributions to these accounts, consult bankruptcy lawyers in Rockford, IL, to avoid breaking any rules.
Wildcard Exemptions
Illinois has generous wildcard exemptions. Debtors may apply the exemption to assets that would otherwise be non-exempt, such as equity in a vacation home, a luxury vehicle, or cash in savings accounts. The exemption is simple to use as it applies to all property.
Domestic Support Requirements
Though this provision was once obscure, it affects about half of the state’s households. This exemption benefits those who pay and receive child support or alimony. Bankruptcy doesn’t affect your right to take these payments, and you should consider putting them in a dedicated account. Reach out to an attorney with Chapter 7 bankruptcy knowledge, you can protect almost all of your assets. For a no-cost, no-obligation consultation with bankruptcy lawyers in Rockford, IL, visit Crosby Law Firm at https://www.thecrosbylawfirm.com
