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Bankruptcy exemptions can provide you with some stability

| Jul 27, 2020 | Bankruptcy |

Are you afraid that bankruptcy will leave you with nothing? If so, then you probably don’t see the value in personal bankruptcy. But this is a common misconception. The truth is that bankruptcy can help you shed overwhelming debt while allowing you to keep enough resources to be financially stable afterwards. Let’s take a look at how bankruptcy leaves you after the process is completed.

Bankruptcy Exemptions

Illinois recognizes a number of bankruptcy exemptions, each of which are meant to provide you with stability post-bankruptcy. Here’s a look at just some of the things that are exempt from bankruptcy:

  • Retirement accounts
  • Up to $15,000 in home equity
  • Up to $2,400 in equity in a vehicle
  • Up to $1,500 in professional tools and books
  • Your right to recover funds from government programs like Social Security disability and unemployment benefits
  • Your right to receive child support and alimony
  • Your clothing, books, and pictures
  • Up to $4,000 in other property of your choosing

There are other exemptions, too. Together, they can provide you with the support you need post-bankruptcy to move on confidently with your life.

Reaffirmation Agreements

Even if these exemptions aren’t enough for you, you might be able to keep certain assets by reaffirming the debt that is tied to it. Entering into one of these agreements means that the debt won’t be discharged in bankruptcy, but you’ll get to keep the asset post-bankruptcy as long as you stay current on the debt associated with it. This tactic is often used to keep vehicles that are worth more than the bankruptcy exemption limitation.

If you’re dealing with overwhelming debt, don’t be afraid to consider bankruptcy. It truly can be the best way to give you the fresh financial start you deserve.