Chapter 7 is known as the liquidation bankruptcy and this can cause concern for many people living in Illinois. However, the Illinois General Assembly has established certain laws that grant exemption status to some types of personal property.
One property that is considered exempt is medical equipment. For example, if a doctor has prescribed that you, as the patient, should have a medical bed, then that bed may be considered exempt from the liquidation. Other items that may qualify under this definition may be contact lenses, fall detection systems, surgical implants, wheelchairs, ventilators, and dialysis machines.
Other sources of income may also be considered exempt in a bankruptcy court such as the following:
- Veterans benefits
- Spousal maintenance
- Child support
- Social Security benefits
- Life insurance payouts
Additionally, if you lost a loved one, upon whom you relied for support, and received a wrongful death payout, you may be able to keep that money. If that same person was injured, or you suffered an injury caused by the negligence of another person, the law allows you to keep up to $15,000 of the payout value. If the injury was caused by a criminal act, then you may be able to retain the entire amount, despite your bankruptcy status.
Property that has a genealogical value may also be exempt from seizure in a Chapter 7 bankruptcy. This can include family photographs or the family bible. Clothing, cars (if your equity interest is not over $2,400), professional books or trade tools may also be named as exempt property. It is important to understand that the determination of what qualifies as exempt personal property may be in the hands of the bankruptcy court and therefore, this information should not be construed as legal advice.