Q: I am an IL resident being taken to court by a creditor. I own my home outright, with no mortgage. Can I file bankruptcy?
Can I file bankruptcy and keep my home?
A:
Whether you file or not the same rules apply as to protecting the house.
In Illinois you can protect up to $15,000.00 equity in a house you live in by claiming homestead.
This applies to creditors as well as the bankruptcy trustee.
A:
The homestead exemption mentioned by the other attorney probably does not completely protect your home from the creditor. In a chapter 7 case, the trustee would probably want to sell your home to pay off the creditor. In a chapter 13 case, you can keep your home, but will still have to pay off the debt through a five year plan. You might also want to look into a home equity mortgage to pay off the debt.
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