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The Use of a Homestead Exemption

Posted on in Bankruptcy

In order to protect spouses and children left behind when the provider of shelter has died, some states have enacted a homestead exemption. If a homeowner dies and leaves behind a dependent spouse or dependent children, this exemption protects their home from taxes, creditors and other situations which could put that property in jeopardy.

Typically, homestead exemptions can fulfill one to three of basic functions. First, they can stop a forced sale of a primary property to meet the demands of creditors in a bankruptcy. Second, they can offer a surviving spouse with shelter. Third, a homestead exemption can alleviate some property taxes that are levied on homes.

In Illinois only a certain dollar amount of home equity is protected when filing for a homestead exemption. For a single person, you can claim up to $15,000 of their home or property. If you are married and filing jointly, you can have double the amount protected. If your home is sold to pay off creditors you are entitled to a check for the equity you own in the home for up to the exemption amount. Proceeds from the sale of the home are also protected for one year. To understand the benefits of filing for bankruptcy jointly, contact a trusted bankruptcy attorney.

This is just an example of one exemption you can use to protect your property during a bankruptcy. Other homestead exemptions available to parties such as disabled veterans, senior citizens, as well as exemptions for religious, charitable or educational institutions. If you are getting harassing calls from creditors or you are worried about your property being seized, please contact an experienced bankruptcy attorney in Arlington Heights today.

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