Legal Question in Bankruptcy in Illinois

Re: Illinois Bankruptcy

Excellent question. Although both spouses are not required to file bankruptcy jointly, the Bankruptcy Code does require both spouses income to be included in the means test analysis. However, most people 'pass' the means test and can file for Chapter 7 bankruptcy protection. As for any joint debts, or family medical debts, the non-filing spouse may still be responsible. 401(k) contributions are 100% exempt in Illinois, as long as they remain in the retirement account and are not converted to cash. As for the home, it would depend on the value of the home, and the balance owed on the mortgage. Each party can exempt $15,000 of equity in Illinois, so unless it has a large amount of equity, then it shouldn't be effected in a Chapter 7. Now, if your combined income is too high for chapter 7 or if your home has too much equity, a chapter 13 bankruptcy can help, where you could pay back your bills, sometimes as low as 10 cents on the dollar for unsecured debts.

Since each case is unique, I encourage you to call me for a free consultation where I can examine your case in more detail and provide you more specific answers.

My contact info is located in the profile below. I look forward to hearing from you. Thank you.

Sincerely,

Terry Leeders