When you decide to file for bankruptcy in Illinois, you may worry about losing one of your most important possessions--your home. At the Law Office of Paul R. Idlas, we want to help you understand what might happen to your house once you start resetting your finances.
You may think that filing for bankruptcy means you will lose all of your possessions which have any value. The Washington Post says this does not always include your home. There are different types of bankruptcies and the particular terms of each one determine whether you may keep your house. If you file for Chapter 13 bankruptcy, you typically set up a payment plan. In this situation, you may generally keep your home. However, it is essential to make timely payments to ensure you retain all of your valuable assets.
If you decide to file for Chapter 7 bankruptcy, the value of your home may determine whether you can keep it. A bankruptcy court typically looks at the amount of equity in your house. If you have more than a certain amount of home equity, some courts may decide to sell your home. If your home equity is less than this amount, though, you may be able to keep your house. Illinois law generally determines the amount of home equity you can have to keep your home.
Some of your assets may be considered bankruptcy exemptions. This means that a liquidator would usually not sell these assets to pay your debts. One of these exemptions is your home. Under Illinois law, you may have $15,000 of home equity when you file for bankruptcy. However, your particular situation also plays a role in determining which assets you may keep. You can find more information about this subject on our webpage.