As your Island Lake bankruptcy attorney, I do not want to see you lose any property when filing for bankruptcy relief. It is the trustee who can request that the court order you to turn over property. Thus, the trustee has to make a decision and say is it worth it for me to liquidate this property and sell any proceeds or give any proceeds to the benefit of creditors. Many circumstances, a trustee is not going to do this. This is something that a trustee does not want to do and does not want to make the time to do it if it’s a close call. However, this does not mean a trustee will never sell someone’s house, but it only means that in many circumstances a trustee will not, if exemptions are taken and the actual equity given is a very small amount. These exemptions are determined under Illinois bankruptcy law for all cases filed in Illinois.
And don’t forget either that the fair market value doesn’t necessarily mean the price of the house is going to be sold at that price. The actual sale of the price of the property could be much lower than the fair market value. So that’s another thing the trustee has to take into consideration, is whether or not he can sell that property at the fair market value, and if not, what is the realistic amount that it could be sold, and he has to take into consideration the cost of selling. And then he also ultimately take s into consideration who the person is filing for bankruptcy and whether or not it’s a good thing for the benefit of the creditors and for the interest of the person as well as who is filing bankruptcy. So generally speaking, your house and your car will be protected in bankruptcy, and a person will be able to keep those properties when they file Chapter 7 bankruptcy.
If it appears from the initial interview that there is property at risk, I would offer advice regarding Chapter 13 as well as Chapter 7. Under Chapter 13, the debtor keeps all of his property because he is paying back either all or a portion of his debts over time. The Chapter 13 trustee is only interested in making sure that you are paying your fair share pursuant to the bankruptcy code. If not, the trustee will not recommend your case for confirmation. If that were to happen, it would be up to the judge to make a final decision with regard to confirmation. Make sure that your bankruptcy lawyer explains in detail the different types of bankruptcy.