In Chapter 7 bankruptcy, the “homestead exemption” – which varies by state – refers to the equity you can protect during your bankruptcy. Some states have large or unlimited homestead exemptions while others have none at all, and remember that Illinois does not allow a choice between the state and federal exemption system; you must abide by Illinois’s state system.Within Illinois’s Compiled Statues, you can find “735-5/12- 901,” which allows up to $15,000 in real or personal property such as buildings, lots, condos, farms, co-ops, and mobile homes. In applicable cases, the spouse or child of a deceased owner is eligible to claim homestead.Illinois also allows ownership of property by a couple as “tenancy by the entirety,” and your home may be protected entirely if: you and your spouse are currently married and own the home or property together; and you are filing for bankruptcy alone and the debts you seek to discharge are solely yours. If both spouses file, however, the home is subject to standard rules for joint-filing by a married couple. Visit ilga.gov for more information.If you are struggling financially and considering filing for Chapter 7 bankruptcy, you are not alone. Contact an experienced bankruptcy attorney today for a free consultation.
The Homestead Exemption in Chapter 7
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