If you’re considering filing for Chapter 7 bankruptcy, you may have heard the term “bankruptcy estate.” This describes your property which is subject to sale (“non-exempt assets”) by the case’s trustee to pay off your creditors, and even income that has been earned but not yet received before filing can automatically become part of the bankruptcy estate, while income earned after filing will still belong to the debtor.
While you may fear that “all” of your property will go to the bankruptcy estate, there is a range of state and federal exemptions which help debtors to keep certain types of property. Illinois’s “homestead exemption,” for example, helps you to protect equity in your home during bankruptcy, and Illinois’s “wildcard exemption” can protect up to $4,000 in cash and/or personal property; the wildcard exemption can also be added onto the homestead exemption. It’s also important to remember that any money you have, might, or will receive from a lawsuit or legal claim may also become part of the bankruptcy estate if it cannot be covered by a state or federal exemption.
If you are struggling financially and considering filing for Chapter 7 bankruptcy, you’re not alone. Contact an experienced bankruptcy attorney today for a free consultation.