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If a pending personal injury lawsuit has finally been resolved after you filed for bankruptcy in Illinois, you may be wondering what happens to your award or settlement. Fortunately, you can protect certain property through bankruptcy exemptions.
According to Illinois bankruptcy law, a debtor can exempt up to $15,000 in personal injury recoveries. The law also exempts wrongful death awards and settlements.
In addition, you may also use the wildcard exemption to make up the difference to cover more of your settlement. In total, you can potentially protect up to $19,000 from your personal injury lawsuit.
Remember, if your personal injury claim arose before you filed for bankruptcy, any compensation you receive will generally be the property of your bankruptcy estate in a Chapter 7 bankruptcy. After the exemptions have been applied, then the remaining sum would be used to pay creditors.
When it comes to Chapter 13 bankruptcy, any nonexempt settlement you receive will often be used to pay more unsecured debts in your repayment plan. The timeline to complete the plan is generally within three to five years.
In many states, debtors can also take advantage of federal exemptions. However, Illinois only allows you to use state exemptions.
If you are interested in filing for bankruptcy in Northbrook or within the surrounding area, do not hesitate to let Bach Law Offices, Inc. help you determine if bankruptcy is the right choice for your financial situation. Our legal team can thoroughly assess your finances, figure out all your legal options, and help you overcome your debt and get your life back on track.