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Posted on in Chapter 7 Bankruptcy
Illinois Bankruptcy: Chapter 7

When your financial situation starts to spiral beyond your control, and your debts pile up faster than you can pay them down, you are left to decide if you are going to file for bankruptcy. What, which kind of bankruptcy is right for you - Chapter 7 or Chapter 13?

Chapter 13

If you want to keep your property, then your best option might be to file for Chapter 13 bankruptcy. You can create a payment schedule to catch up on your debt payments, and you should be able to keep your original mortgage for your home or business. You may also choose to file this chapter if your income is too high to file Chapter 7.

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How Do I Know if an Asset is Exempt from Liquidation in my Chapter 7 Bankruptcy Case?

Chapter 7 bankruptcy is often called “liquidation bankruptcy” because it involves the liquidation of the filer's nonexempt assets to satisfy his or her debts. Certain classes of assets are exempt from liquidation, which means that the filer's bankruptcy attorney cannot sell them to recover liquid cash to satisfy the filer's debts. Other assets are nonexempt, which means that they can be liquidated in a Chapter 7 case.

In short, exempt assets are assets that filers need to continue living safe, productive lives. Certain assets, like the filer's primary home, are clearly exempt from liquidation. Others, like certain retirement accounts, are not as easy to discern. Below are a few ways to determine whether an asset is exempt from liquidation or not. If you are ever not sure about an asset's exemption status, ask your bankruptcy lawyer.

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Is This Item Exempt from Chapter 7 Liquidation?

If you have filed for Chapter 7 bankruptcy, you know that you will need to have your nonexempt assets liquidated to come up with the money to repay your creditors. This is done under the supervision of your court-appointed trustee, whose job is to recover as much money from you as possible to pay off your creditors. In exchange for this liquidation, your debts are forgiven.

Liquidation means that any assets that are not deemed to be necessary for your day-to-day life may be sold. Sometimes, disputes can arise about whether a particular item may be exempted or not. This is why you need to work with an experienced bankruptcy lawyer who can protect your interests.

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Illinois Woman Permitted to Keep Rare Book of Mormon in Bankruptcy

When you file for Chapter 7 bankruptcy, part of the process is the liquidation of your nonexempt assets to come up with money to pay off your creditors. These assets are those that are not essential to your daily living or working needs. In some cases, disputes arise regarding whether an item should or should not be exempt from the liquidation process.

This came up fairly recently in a case from Illinois. Recently, the court ruled that a woman who had filed for Chapter 7 bankruptcy could keep her rare copy of the Book of Mormon. The book was published in 1830 and worth tens of thousands of dollars as a historical piece. She was permitted to keep it because under Illinois law, bibles and other religious texts are exempt from the items that may be sold to satisfy a filer's debt. This ruling came after her case's trustee requested permission from the court to sell the book, stating that she had other copies of the text available to use as worship aids. But the court found that the book could be exempt because of its personal value to the woman, who is a member of the Church of Jesus Christ of Latter-Day Saints.

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Consumer credit has a colorful past. The ability to say “charge it” was not always in the U.S. consumer's vocabulary. Consumer credit or being able to purchase goods and services without cash on hand had its humble beginnings in the late 19th century.

Since most of the population resided in rural areas, the use of credit was established by local shopkeepers who extended credit to fellow neighbors based solely on reputation alone. This exchange would soon decrease with the industrialization of the country as larger companies pushed the local retailer into the background thus eliminating the extension of credit to the local consumer through reputation alone.

Not until the 1920s did manufacturer's began extending credit to the average American consumer. General Motors forged first with the installment credit model in 1919 with other manufacturer's soon following suit. Credit experienced a rebirth. In 1949, Diners Club arrived on the scene as the first consumer credit card with bank backed credit cards issued for widespread usage in the 1960s.

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