Protecting Your Assets in Chapter 7
In order to obtain a discharge in Chapter 7, the debtor may need to surrender some assets. Under the applicable exemption laws in Illinois, the debtor in a Chapter 7 is permitted to keep a minimal amount of assets. In many cases, though, the debtor's assets have such a minimal value that they are deemed as "exempt" from liquidation and thus protected.
The State of Illinois has opted to apply its own statutory exemption allowances to determine whether a Chapter 7 debtor's assets are protected. Under the Illinois exemption statute, the following protections are available (partial list):
- $15,000.00 of equity in the debtor's primary residence. In some cases, a married person filing individually may be able to protect 100% of the equity in the marital residence if there is no joint debt.
- $2,400.00 of equity in a vehicle.
- $4,000.00 of personal property.
- $15,000.00 of the net proceeds of a personal injury award or settlement.
- 100% of a qualified retirement account, such as a 401k or pension.
If the debtor's assets are worth more than the exemptions, the assets must be surrendered to the trustee so the assets can be liquidated. If the assets are subject to liquidation, the debtor can protect the assets by filing for Chapter 13 protection instead.
We Assist Debtors to Determine Whether Their Assets will be Protected in Chapter 7
There is no reason to fear that you will lose any assets. As part of our free evaluation, we will determine whether your assets are protected so that there is no risk of loosing any assets.