Question 1

Will I lose my home, auto or other property in a Chapter 7 Bankruptcy?

Accepted Answer

A single filer can preserve $15,000 in equity and joint filers can preserve $30,000. You also have to factor that some equity is consumed by real estate broker fees and closing costs. We can estimate whether you are safe or at risk.  In addition you have a $4000 "wild-card" exemption that you can apply to any property you own and $2400 towards a car.  Some items, such as a workers compensation awards or 401(k) accounts are completely exempt.

Question 2

Will I lose my income tax refund in a Chapter 7 Bankruptcy?

Accepted Answer

In a chapter 7, you could lose a refund that has been deposited into your account at the time of filing. It will be treated simply as normal "cash". With proper exemption use, you can completely preserve any pending Earned Income Credit, Child Credits, School Credits and similar portions of your refund. You could also take steps to preserve the pro-rata portion of your spouse's tax refund.

Question 3

Do I have to included my Spouse in my bankruptcy?

Accepted Answer

You do not have to include your spouse. However, your spouse's income must be reported unless you declare a separation and you should consider proper asset management and declaration of your joint assets to minimize any issues.  You spouse's credit report will not be affected at all.

Question 4

I am in an Illinois LGBT Civil Union, can we file a joint bankruptcy?

Accepted Answer

Yes, every filing district is different. In the District that covers Illinois, and LGBT union has the same rights as a common marriage.

Question 5

How soon can I get credit after my Chapter 7?

Accepted Answer

Banks and other creditors will want your business immediately. Car lenders will send you promotional materials within days. Your credit profile will remark that a bankruptcy has been filed, but with new credit and it's proper use, it is common to have scores in the 700's within a year.

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Chapter 7 Bankruptcy Frequently Asked Questions (2022 Update)

Chapter 7 FAQ's