Bill collectors often tell tales to scare you into sending them money. Because bankruptcy prevents them from contacting you, they also attempt to dissuade you from filing bankruptcy by telling more tales. Check out the facts for yourself.
Chapter 7 Bankruptcy is designed to eliminate the heavy burden of debt, while allowing you sufficient assets to go forward with life. This is called giving you a “Fresh Start”.
Various federal and state laws work in conjunction to allow you to exempt or to protect certain property from the reach of creditors. These exemption laws apply to the equity you have in the property. Illinois, for example, allows you to protect up to $15,000 in equity in your homestead. Other common exemptions include all clothing, child support, retirement, social security and work comp benefits; $2,400 for one car, $15,000 personal bodily injury, and $4,000 of any personal property. Many more exemptions exist. Married couples filing jointly can double the above amounts. In certain cases, a widow may claim an additional $15,000 homestead exemption for a total of $30,000, if a deceased spouse resided in the homestead residence prior to death.
If your property serves as collateral for a loan, you need to timely pay all monthly payments on these loans in order to keep the property. A bankruptcy lawyer can help you apply the appropriate exemption to protect your property while you gain a fresh financial start in life.
Andy Miofsky, Esq.
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Last modified: May 7, 2011