|Posted on January 10, 2020 at 2:55 PM|
An individual filing for Chapter 7 bankruptcy can usually keep their home and vehicles. Secured debts such as a mortgage or vehicle loan may be reaffirmed, surrendered, or redeemed. A debt may be reaffirmed by the debtor choosing to keep the property, signing a reaffirmation agreement, and continue paying on the debt. On the other hand, the debtor may choose to surrender their home and/or vehicle and be released for the debt associated with that property.
A debtor is entitled to a $15,000.00 homestead exemption in the State of Illinois as well as a vehicle exemption in the amount of $2,400.00. An exemption is used to keep equity in real property and/or personal property from the reach of creditors. An exemption is used to cover the difference between the value of the property and the amount of the loan on the property. This means that the equity in a home and/or vehicle may be exempted up to the exemption amount, keeping the exempted equity safe from creditors.
Married debtors may choose to file for Chapter 7 bankruptcy jointly and double their homestead exemption and vehicle exemption. The vehicle exemption can only be used for up to $2,400.00 for one vehicle per debtor.
For more information, please call us at 618-544-8425 to schedule a bankruptcy consultation with Bill Thomas so he can better answer your questions according to your personal circumstances. We will be happy to help you with your debt relief needs!