Legal Question in Bankruptcy in Illinois

Chapter 7 - Spouse and House

I have been self employed for 11 years (50% owner of a service S Corp with no assets) and it looks like I will be loosing a lawsuit (personal guarantee on a lease). I also have some credit cards in my name only. The only asset I have is whatever equity is in my Illinois home (about $40,000 held in joint tenn with my wife). Can I file chapter 7 alone and not have my wife brought into it ? What will happen to our house? I know I need to talk to an attorney (and I will), but the amount of the judgement is probably going to be high ($30.000) and I cannot pay it. Help!


Asked on 9/27/00, 1:46 pm

2 Answers from Attorneys
Lawrence A. Stein Aronberg Goldgehn Davis & Garmisa, LLC

Re: Chapter 7 - Spouse and House

In bankruptcy, Illinois residents are entitled to exempt from creditors $7,500.00 in home equity. You and your wife can each claim that amount, for a total of $15,000.00. Thus, you amd your wife should both consider filing for bankruptcy protection. You and your wife can claim other exemptions, such as a wildcard exemption of $2,000.00 each in any property. That brings you up to $19,000.00. There are legal ways to structure your assets to maximize your expemptions that may allow you to keep your home, but time is of the essence, both to structure your assets, and because Congress is considering amending the law which may adversly impact your situation if you file after an amendment is enacted. Call me or another attorney right away.

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Answered on 10/26/00, 8:44 am
Charles Dobra Charles Wm. Dobra, Ltd.

Re: Chapter 7 - Spouse and House

You need to see a bankruptcy lawyer IMMEDIATELY. You need to do this before a Memorandum of Judgment is filed in the chain of title. The first thing you need to do is transfer the title to your real property to Tenancy by the Entirety. Then you can file, and I think a joint petition might be proper, to get rid of the debt. You have exemptions under Illinois law, and it may be possible to protect all of your property.

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Answered on 10/26/00, 3:35 pm


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