Legal Question in Bankruptcy in Illinois

Is equity in my home transferable to a new home?

My husband and I are considering filing Chapter 7 because our construction business is unable to pay suppliers due to uncollectible accounts receivable. We have a mortgage on our home and approximately $25,000.00 worth of equity in it. We are closing down the business and have plans to relocate (in approximately 4 weeks) to another state where economic conditions are more favorable. If we can sell our home before we file and move, would it be legal to use the exempt amount of equity from the sale of the home as a down-payment on the purchase of another home at our new location?


Asked on 7/24/99, 2:05 am

1 Answer from Attorneys
Charles Dobra Charles Wm. Dobra, Ltd.

Re: Is equity in my home transferable to a new home?

Your question is most interesting. As a seminal matter, by moving you might create a venue problem, even though in bankruptcy cases venue is not jurisdictional. But it is a problem nonetheless. Since you indicated that you are Illinois residents, it would appear that after the subtraction of your exemption, that there would still be $10,000.00 for the Trustee to administer. Because of this, you might which to (1) consider a Chapter 13 and (2) see a bankrupty lawyer as soon as possible for an office consultation. Also in the mix is the manner in which you conducted your business; given the proper set of facts, that entity might have to file a separate proceeding.

Read more
Answered on 7/26/99, 4:52 pm


Related Questions & Answers

More Bankruptcy Law questions and answers in Illinois