When you experience financial hardship in your life, you may find yourself in a position where you can no longer afford your mortgage payments. This is a scary situation for many people who are facing bankruptcy and you may wonder if you will end up homeless. We understand how the homestead laws work in Illinois and have helped many clients retain their homes during bankruptcy.
According to the Illinois General Assembly, the state’s homestead laws allow you to claim up to $15,000 worth of property as a homestead. This amount can double if the property is jointly owned, covering up to $30,000 worth of property. Claiming a property as your homestead during a bankruptcy prevents creditors from being able to seize your home. If you owe past due state taxes, however, you still may have to sell your house to cover those.
You may choose the federal exemption for your homestead instead of the state exemption if the federal law gives you more protection. This may increase the amount of property that you can claim exempt. However, the federal law requires that you live in the residence for 40 months before you can claim an exemption on it.
Homestead protection laws offer a way to prevent homeowners from experiencing homelessness due to financial hardships. These laws are not limited to just homeowners, however, and may protect property owners of different types of property. Even if you own a small piece of property such as an RV, you will still need a place to live if you have to claim bankruptcy. Homestead laws allow you to claim that property as part of your estate, which protects you from having to sell it to meet the demands of creditors. More information about this topic is available on our webpage.