What types of assets can be protected in Chapter 7 Bankruptcy?

In Illinois, Chapter 7 Bankruptcy Law offers a way for individuals to get out from under the burden of overwhelming debt. In exchange for a fresh start, individuals must surrender their non-exempt assets to a bankruptcy trustee. Certain assets can be protected, or “exempt,” from the estate, meaning they are not subject to liquidation. Under Illinois law, individuals may exempt up to $15,000 of equity in their home, $2,400 in a motor vehicle, $4,000 in miscellaneous personal property, future income payments, and certain annuities. In addition to these property exemptions, there are also exemptions that protect a person’s income sourced from Social Security, unemployment, wages, child support, alimony, and other sources. In terms of retirement accounts, up to $500,000 can be protected in an Individual Retirement Account or profit-sharing plan. Pension benefits, Social Security benefits, and veteran’s benefits are also exempt from liquidation. In certain cases, individuals can also protect up to $15,000 in jewelry and heirlooms, as well as $7,500 in tools of the trade. This means that items used in the trade or business of the individual, such as photography equipment, can be shielded from liquidation. To ensure your assets are properly protected in the Chapter 7 Bankruptcy process, it is important to consult with an experienced bankruptcy attorney. A knowledgeable attorney can review your situation and provide guidance on which assets are exempt from liquidation and what you can do to ensure your rights are protected.

Related FAQs

How does filing for Chapter 7 Bankruptcy affect my taxes?
Are there different kinds of bankruptcy?
Can I keep my retirement accounts after filing for Chapter 7 Bankruptcy?
What is the process for filing for Chapter 7 Bankruptcy?
What is a reaffirmation agreement and how does it work in Chapter 7 Bankruptcy?
Are there income requirements for filing for Chapter 7 Bankruptcy?
How long does the bankruptcy stay on my credit report?
What are exemptions?
Will filing for Chapter 7 Bankruptcy stop wage garnishments?
What is a reaffirmation agreement?

What types of assets can be protected in Chapter 7 Bankruptcy?

Related FAQs

Related Blog Posts