In Chapter 7 bankruptcy, you petition the bankruptcy court to discharge most of the debts you owe. In exchange for this discharge, the bankruptcy trustee can take any property you own that is not exempt from collection (see below), sell it and distribute the proceeds to your creditors. For more information on Chapter 7, see Chapter 7 bankruptcy.
In Chapter 13 bankruptcy, you file a repayment plan with the bankruptcy court to pay back all or a portion of your debts over five years. The amount you'll have to repay depends on how much you earn, the amount and types of debt you owe, and how much property you own. For more information on Chapter 13, see Chapter 13 bankruptcy. For assistance with both Chapter 7 and Chapter 13 bankruptcy, contact our Naperville bankruptcy attorneys.
What You Can Keep In A Chapter 13 And Chapter 7
You do not have to give up any of your property in a Chapter 13 bankruptcy because you fund your repayment plan through your income. In Chapter 7 bankruptcy, you are eligible to keep your property that is exempt by Illinois law. You are typically allowed to keep these types of property in a Chapter 7 bankruptcy:
- Equity in your home, commonly called a homestead exemption. Under the Bankruptcy Code, in Illinois you can exempt up to $15,000 for an individual and $30,000 for a joint filing of your equity.
- Insurance. Usually, you can keep the cash value of your policies and will not be required to cash in any whole life policies.
- Retirement plans. Most retirement plans are exempt in bankruptcy.
- Personal property. You'll be able to keep most household goods, furniture, furnishings, clothing (other than furs), appliances, books and musical instruments up to a garage sale value of $4,000 per person.
- Your car. You keep a vehicle as long as your equity doesn't exceed several thousand dollars. Illinois gives you a "wild card" amount of money — $2,400 per vehicle — that you can apply toward any property.
- Public benefits. All public benefits, such as welfare, Social Security, and unemployment insurance, are exempt.
At Lynch Law Offices, our bankruptcy attorneys have more than 50 years of combined experience. Over the course of our careers, we have come to focus on the value of personal attention. When you choose us as your debt relief counselors, we will offer guidance that is tailored to your situation. We represent individuals and businesses in Naperville, Wheaton and throughout DuPage County.
For a free consultation about bankruptcy, contact us toll free at 800-491-7493.
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.