Illinois Bankruptcy Laws
The state of Illinois is divided into three bankruptcy districts: Illinois Central District Court, Illinois Northern District Court and Illinois Southern District Court. These courts serve the entire state of Illinois.
Most people in Illinois file under either chapter 7 or chapter 13 because Chap 11 BK is too complicated and expensive for the typical debtor. It is primarily used by businesses that need to reorganize in order to get out from under debt. Lehman Brothers is the most recent big name undergoing Chapter 11 bankruptcy.
Illinois Bankruptcy Exemptions
Exemptions are laws passed by every state that allow you to protect certain types of your property from your creditors when you file bankruptcy. According to the Lawyers.com website, under Illinois bankruptcy laws, you can keep:
- Unemployment, disability, workers' compensation, veterans' and social security benefits
- Retirement plan and life insurance proceeds
- Clothing and school books
- Professional books and tools of the trade up to $750 in value
- Family photos and bible
- Health aids
- Personal injury recoveries up to $7500
- Wrongful death recoveries needed for support
- $2000 of any personal property
- Tools of the trade up to $750
- Alimony and child support as needed
- Property of business partnership
NOTE: These are the major bankruptcy exemptions. Check with your bankruptcy lawyer for a full exemptions list.
New Bankruptcy Law Changes - Outlines major changes you should know about in the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA), also known as the new bankruptcy laws.
This is important! The new bankruptcy law requires all debtors to fulfill two education requirements: a credit counseling course prior to filing and a financial management course before obtaining a discharge. Failure to complete either of these courses and file the appropriate certificates with the court will prevent a successful bankruptcy. The Chapter 13 Trustee will offer the required courses to Chapter 13 debtors, but Chapter 7 debtors are required to take the courses on their own.
Find a U.S. Trustee Approved Pre-Bankruptcy Counseling Provider and Post-Filing Debtor Education Provider.
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