The value of property will be very important to your Mettawa bankruptcy attorney. As far as a house is concerned, this is the same principle as the car. Generally speaking, your house will be protected and you will not lose your house in bankruptcy. However, it’s possible to lose your house in bankruptcy if there is a lot of equity that cannot be protected. The same example applies to the car as does to the house when deciding whether or not a trustee will take and liquidate somebody’s home. The exemption amount is determined under Illinois bankruptcy law.
The exemptions for a house, or your homestead in Illinois, is $15,000.00, and that is doubled with a person who is filing bankruptcy jointly with their spouse. So, for instance, if a person has equity in their property that’s worth roughly $50,000.00, one, that person would be lucky if their equity is worth that much in today’s market. This usually is an issue that only arises with people who have had their home or their real estate property for a number of years. We’re talking about properties that were bought in the early ‘90s, mid-‘90s or prior.
For instance, the example of a person who has equity in $50,000.00 in their home, exemptions will eat up $30,000.00 of the equity if filing jointly. If they’re not filing jointly and filing an individual bankruptcy, then only $15,000.00 would be protected, which would leave you with roughly $35,000.00 in equity.
So a trustee once again has to look at the cost and the actual sale and proceeds of a sold house. So the same principle applies from the car example to the house example. A trustee will have to take into consideration the closing costs and the hiring of an attorney to represent him in selling real estate. Right off the bat, you should consider 10 percent of the total amount of the sale will be used as a closing cost. So if the property is worth $100,000.00, then that property when sold will have a closing cost of $10,000.00. Not only do they have to do the closing cost, but the trustee also has to appoint an attorney to represent him, which will also include a lot of costs that could eat up any equity.
So in this example, your $35,000.00 equity single or your $20,000.00 equity joint after all exemptions is taken into consideration, minus the 10 percent for the closing costs, in our example, $10,000.00, plus the attorney’s fees, which could be upwards of $5,000.00 or more, really eats up the equity of that property, not to mention also any liens or issues that occur with the property. For a more accurate picture of your financial situation, contact a bankruptcy lawyer in your area for assistance.