Posts Tagged ‘Illinois bankruptcy exemption laws’

Bankruptcy Exemption Laws In Illinois

Though the US federal laws are applicable in the majority of the states in this country, individual states have been allowed to have certain modifications when it comes to bankruptcy exemption laws. The similar thing holds true for Illinois also. There are district bankruptcy courts in each state that regulate such cases. Illinois is among those states that have their own set of property exemptions, which are applicable in those cases where the petition has been filed under chapter 7.

Homestead Exemption In Illinois

If you have a personal residence, you can get it exempted up to the equity value of $15,000. It can include different types of properties, such as mobile home, a condo, a plot of land, a farm, or an apartment.

Insurance

As per the bankruptcy exemption laws in this state, there are also specific provisions for exemptions of insurance benefits that may include life insurance as a beneficiary, health and disability claims, fraternal societies, and others.

Public Benefits

If you are receiving some kind of public benefits, you can continue receiving the same even after getting bankrupt. The public benefits that can be exempted include child support, alimony, disability or illness benefits, unemployment compensation, veteran’s benefits, public assistance, and Social Security benefits.

Cars And Vehicles

Illinois bankruptcy exemption laws also have provisions for automobiles exemptions that allow you to keep your cars and vehicles up to the value of $2400.

Personal Property

You also have the legal right to keep $4000 in equity in other personal properties. For example, if you have a saving bank account, the trustee will leave cash up to the value of $4000 in that account and take the remaining amount to pay off your debts.

Other Exemptions

Besides that, petitioners under chapter 7 are also allowed to exempt tools of trade, school and professional books, prescribed health aids, and clothing.

Creditor Exclusion

The laws have also assigned certain legal rights to the creditors in order to make sure their interests are well protected and that they receive a fair judgment. Though the basic objective is to help the debtor to get rid of their debts and to give a fresh start to their financial life, the laws also have some room to make sure the creditors are also not at loss. For example, you may still be liable to certain debts and loans, especially the ones where it is proved that you had received the loans by a wrongful act, such as embezzlement, fraud, or by using a false financial statement. If creditors feel such possibilities, they can file an appeal in the court. The debts will not be discharged if the judgment comes in the favor of the creditors.

Overall, the bankruptcy exemption laws in Illinois are very different from other states. You must be well aware of the different aspects associated with the same in order to make the best use of these laws.


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