Illinois and Georgia Bankruptcy Exemptions Part 2
In our last post, we debunked a common myth about bankruptcy: some folks misguidedly believe filing will cause them to lose their belongings, including their house. But bankruptcy can not only eliminate your debt, it can actually help you save your home, car and other possessions. Want to see for your own eyes? Take a look at your state's exemptions. In addition to federal exemptions, each state has its own list of items that are protected from repossession.
In Illinois, for instance, you can exempt up to $7,500 of your home's equity or up to $1,200 of the equity in your vehicle. In Georgia, it's $5,000 for the house, $1,000 for the car. If you're married, you're in luck - those amounts double.
What do the limits mean exactly? Well, equity is the value of the item minus the amount left on the loan. So if the exemption covers your equity and you can continue making payments on the loan, you're free to keep the item. Of course, if you file for Chapter 13 you probably won't even have to worry about exemption limits because you'll be making payments on debt anyway as part of your repayment plan. Meanwhile, you'll be legally protected by an automatic stay order. That's why we often recommend Chapter 13 for homeowners with homes at risk of foreclosure.
Here's a snapshot of exemptions for Illinois and Georgia.
In Illinois, you can keep the following:
- Property up to $7,500, or proceeds from the sale of property up to a year
- Vehicles, up to $1,200
- 85% of your wages, though a bankruptcy judge can authorize more
- Family photos, schoolbooks and needed clothing
- $2,000 of any property you wish (the "wild card")
- Workers' comp, disability, social security, child support
In Georgia:
- Property up to $5,000
- Vehicle up to $1,000
- At least 75% of your wages, though a bankruptcy judge can authorize more
- Jewelry, up to $500
- Animals, crops, clothing, appliances, books, furnishings, household goods, musical instruments up to $200 per item ($3,500 total)
- $400 in property of your choosing
- Workers' comp, disability, social security, child support
For more detailed information, check out the official lists for Illinois and Georgia.
Find the lists a bit overwhelming? Hey, you're not alone. Laws surrounding bankruptcy are known for being complex. That's why it's in your best interest to have a professional bankruptcy attorney on hand to answer your questions. Our attorneys in Chicago and Atlanta can answer your queries, determine if bankruptcy is the best plan for you, and guide you through the process. Just sign up for our free personal debt analysis to get started. If you're worried about losing your stuff, remember that there are no exemptions if you don't take action. Bankruptcy, on the other hand, can protect your assets - and your future.