Bankruptcy And Your Vehicle
In Illinois, will you lose your car or truck if you declare bankruptcy? The answer, like almost everything else in the law, is “it depends.” Several factors will determine whether you get to keep your vehicle after an Illinois bankruptcy. First, however, you should understand that bankruptcy is not always the best option for everyone facing mounting debts. Before taking any legal action, discuss your circumstances and options with an experienced Chicago bankruptcy lawyer.
Every state provides those filing for bankruptcy with exemptions to protect a certain amount of property. Illinois allows a $2,400 exemption for your vehicle, so if the value of your vehicle is under $2,400, you get to keep it. Illinois also gives you a $4,000 “wildcard” exemption for protecting miscellaneous property other than real estate. You can use all or part of that additional protection for your vehicle. For example, if your vehicle is worth $3,400, you could add $1,000 from the wildcard exemption to the $2,400 vehicle exemption and protect your vehicle. You would still have $3,000 of the wildcard exemption available for protecting other items.
The $2,400 vehicle exemption exempts only one vehicle; you can’t use it to protect two cars worth $1,200 each, although you may apply the wildcard exemption toward a second vehicle. If married debtors file a joint bankruptcy in Illinois, each debtor is entitled to $2,400 in exemptions to protect one motor vehicle. Thus, if you and your spouse jointly own one car, you can double your exemptions and protect a car worth up to $4,800. However, you cannot double your exemptions to protect a car either of you own individually.
Illinois’ bankruptcy and bankruptcy exemption laws change occasionally, so consult with a bankruptcy lawyer to make sure that you’re acting on current information. If you’re struggling with mounting debts in the Chicago area, before you take any other action, discuss your circumstances, rights, and options as quickly as possible with an experienced Chicago bankruptcy lawyer.
