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Whether you file for Chapter 7 or Chapter 13 bankruptcy in Illinois, homeowners may benefit from the state’s homestead exemption, which protects equity in your home.
The homestead exemption is applicable to both real and personal property that you claim as a residence, from houses and condominiums to mobile homes and shares in a co-op. Additionally, it also applies to proceeds from the sale of any property for up to one year from the date the home is sold.
What is the amount of the homestead exemption in Illinois?
When it comes to bankruptcy in Illinois, a homeowner can exempt a maximum of $15,000 in home equity or the equity of other property covered by the homestead exemption. In order to claim this exemption, your name must be listed on the deed as a legal owner of record.
For married couples filing a joint bankruptcy, Illinois allows you to double the amount of the homestead exemption and protect up to $30,000 of home equity. Both spouses must be listed as owners to take advantage of the increase in the amount of protection.
However, if a married couple jointly owns a home as a single marital entity and the property is held as a “tenancy in the entirety,” this may allow the couple to protect more than the amount of the homestead exemption. Furthermore, creditors cannot obtain the property to pay only one owner’s debts – only if both spouses are liable for the debt.
The homestead exemption also has a special provision that allows both surviving spouses and children to protect the equity of the home if the owner passes away. Surviving children can protect the equity in the home until they reach 18 years of age.
The homestead exemption is automatic. This means filing a homestead declaration is not required in order to claim this exemption in bankruptcy.
Keep in mind, Illinois does not allow you to use federal bankruptcy exemptions. If you live in the state, you can only use state exemptions.
What Is Exempt Property in a Bankruptcy Filing?
What Are Exempt & Nonexempt Assets in Chapter 7 Bankruptcy?
If you or a loved one is interested in filing for bankruptcy in Northbrook, contact Bach Law Offices, Inc. today at (847) 440-5998 and speak with our experienced bankruptcy attorney.