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Can your lawyer help you keep your vehicle in Chicago after bankruptcy?

Many people assume that filing for bankruptcy means giving up everything they have. However, you are entitled to retain a certain amount of personal property due to exemptions. One of the items qualifying for a bankruptcy exemption is your vehicle.

The Illinois Motor Vehicle Exemption allows an individual to exempt up to $2,400 worth of equity in a single vehicle. A married couple who is jointly filing for bankruptcy has two options. Each party may claim an exemption up to $2,400 on one vehicle each; or they may combine the vehicle exemption and claim up to $4800 on a single co-owned vehicle. However, a debtor cannot apply his or her motor vehicle exemption to an automobile solely owned by the other party.

If the amount of your Illinois Motor Vehicle Exemption allowance equals or exceeds the amount of equity that you have in your vehicle, you will be able to keep it when filing Chapter 7 bankruptcy. For chapter 13 Bankruptcy, the amount of your Illinois Motor Vehicle Exemption will be excluded from the “nonexempt property” total, which is used to calculate the amount that you must repay your non-secured creditors.

If you have more equity in your vehicle than you are allowed to exempt, you may need to sell it or pay the difference to your creditors. However, Illinois residents also have the option of applying their wildcard exemptions, or a potion thereof, to their vehicles. The Illinois Wildcard Exemption allows each debtor to exempt up to $4000 worth of personal property, and it can be applied to virtually anything that is in your own name. If a portion of the wildcard excerption is applied towards vehicle equity, the remainder can be applied to other property.

Filing for bankruptcy can be the best decision, or the biggest mistake, that you have ever made, and a good lawyer can make the difference. It is important to choose a reputable attorney who has your best interests in mind. If you feel that you are being pressured to commit to filing bankruptcy, it may be advisable to seek a consultation with a different lawyer. Bankruptcy is an excellent financial solution in some situations, but it is not right for everyone. Your attorney should answer your questions, discuss your concerns, and carefully evaluate the details of your situation before moving forward.

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    Many people assume that filing for bankruptcy means giving up everything they have. However, you are entitled to retain a certain amount of personal property due to exemptions. One of the items qualifying for a bankruptcy exemption is your vehicle. Read More


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