Most people are under the misconceptions that if they file for bankruptcy, then they will lose all of their property. This is simply not the case. Most people who file for Chapter 7 bankruptcy retain all of their personal property. That is because the state of Illinois provides exemptions as it related to personal property. This means that a certain value of property is protected while going through the bankruptcy process. The transcript of the video below talks about the specific dollar amounts in greater detail
Jesse Barrientes: Some people have bigger boxes, Dave, and some people have smaller ones. So what property then can I continue to keep in a Chapter 7 bankruptcy? Talk about a house. A lot of people have – and this is what I find because their home is their home. And people are really, really attached to their homes, especially if they have family and they have smaller children; especially in those circumstances. But a lot of times, they’ve made certain that they have paid their mortgage and they are up-to-date on it. They are not behind on it. It’s just everything else.
David Siegel: Remember, a house is not a home without love, Jesse.
Jesse Barrientes: Oh, boy. That’s good, that’s really good, Dave. So there are some houses out there but not necessarily homes.
David Siegel: Yeah, all right. Under Illinois law, getting back to the business here, you are allowed to protect as an individual up to $15,000 worth of equity in real estate. So if you are filing husband-and-wife, you can protect up to $30,000. And in reality, you can protect a little bit more than that because the trustee would have to sell the property, liquidate it, pay you your exemption and there’s costs involved in that.
Jesse Barrientes: So I get – if I’m over the exemption and they sell it, then I’m going to get it, my money back.
David Siegel: Right. As far as a vehicle, you are entitled to a $2400 exemption in one motor vehicle.
Jesse Barrientes: Just one.
David Siegel: Just one. Husband-and-wife case with one car, you can double that to $4800.
Jesse Barrientes: Okay, so $2400 for your car and $2400 for my car. That’s how that would work.
David Siegel: Exactly. And, very importantly, there’s a $4000 wildcard exemption that you can use to cover any kind of personal property. So in a joint case husband-and-wife, we are talking about $8000.
Jesse Barrientes: So my personal belongings in the house, my clothes, cufflinks.
David Siegel: Your bank accounts, you can put it on your car. You just can’t put it on real estate because real estate is not personal. It’s real property.
