You can keep your exempt property and anything you obtain after the bankruptcy is filed. However, if you receive an inheritance, a property settlement, or life insurance benefits within 180 days after your bankruptcy, that money or property may have to be paid to your creditors if the property or money is not exempt.
Chapter 7 Bankruptcy
In a Chapter 7 case, you can keep all property which is “exempt” from the claims of creditors. When determining what property is exempt you must keep in mind that the value of the property is not the amount you paid for it, but what you could sell it for now. In addition, you do not need to cover the full value of the property, but only your actual equity in any property. For example, if you own a $200,000 house with a $170,000 mortgage, you count your exemptions against the $30,000 which is your equity if you sell it. While your exemptions allow you to keep property even in a Chapter 7 case, your exemptions do not relieve you of the obligation to make current mortgage or car payments-otherwise the mortgage holder or car loan creditor has the right to take the property to cover the debt if you are behind on payments.
Chapter 13 Bankruptcy
In a Chapter 13 case, you can keep all of your property if your plan meets the requirements of the bankruptcy law. In most cases, you will have to pay the mortgages or liens as you would if you didn’t file bankruptcy.
Contact Our Schaumburg IL Law Firm
Robert Kaplan is an experienced bankruptcy attorney in Schaumburg, IL and will guide you through the process.