Chapter 7 bankruptcy is a liquidation bankruptcy process. There are different Chapter 7 bankruptcy exemptions that can protect some of the filing party's property from the process of selling property to repay creditors. Those interested in Chapter 7 bankruptcy protection should be familiar with what the Chapter 7 bankruptcy exemptions are.

Chapter 7 bankruptcy exemptions

There are several categories of Chapter 7 bankruptcy exemptions including:

• Homestead exemption – the homestead exemption allows the filing party to protect equity in their home. A consumer filing for Chapter 7 bankruptcy protection can exempt up to $15,000 in equity in their home from the bankruptcy process. The amount of equity they can protect goes up if the filing party is a married couple filing for bankruptcy jointly.
• Wage exemption – filing parties can exempt a certain percentage of their wages.
• Vehicle exemption – filing parties can exempt up to $2,400 of the value of their vehicle.
• Tools of the trade exemption – filing parties can exempt up to $1,500 worth of implements necessary for the filing party to perform their trade.
• Personal property exemption – filing parties can exempt certain personal property such as necessary clothing, family pictures, prescribed home health aids, certain books and several other categories of items.
• Wild card exemption – the wild card exemption can be used to protect up to $4,000 in property that would not otherwise be exempt.

Other bankruptcy exemption categories include pension and retirement exemptions, government benefits exemptions, insurance exemptions and some others. Bankruptcy property exemptions are an important protection that is built into the Chapter 7 bankruptcy protection process. For that reason, filing parties should be familiar with the different types of property exemptions they may be able to claim.

It is a wise and responsible decision for Illinois residents to have an estate plan. Even if it is a barebones will that details how the person's property will be distributed at the time of death, it is a key document to have. This is true for people of any age. For some, however, there are life changes that arise after they have completed a will. That might include getting married, divorced and having children. For those who have completed a will and have a child after it has been executed, there are certain legal facts to know.

Understanding how having a child impacts a completed will

For the testator, the contents will not be relevant for the child except in certain circumstances. If, for example, the child is left out of the will because it was not updated to reflect the birth, he or she will still be entitled to get the portion of the estate upon the testator's death. It will be the same amount as if the testator had died intestate (without having completed a will). The share the child will receive depends on the rest of the family. For example, there might be a spouse and other children who will be entitled to portions of the estate. A different issue is if the testator intended to leave the child out of the will. Disinheriting the child would need to be addressed in the will.

Unusual factors can impact an estate plan

Most people will think about their will in its most fundamental terms to ensure their heirs get the property as they see fit. This is true for people of any age and all financial positions. Even though the law addresses a case in which the testator had a child after the will was executed, it is still wise to think about how that can impact the estate plan. Updating a will and considering alternatives can be useful.

There are many unexpected events that occur throughout people's lives in Illinois. Some of these unexpected events can be pleasant surprises and benefit people. This is not always true though. Some of the unexpected events can create hardships for people. It could be a car breaking down or appliances breaking down. People may be involved in an accident and suffered injuries or developed an illness or disease. They may have close family members suffer sever injuries and illnesses that require extra care or many other types of unexpected events.

The unexpected events that cause hardships also tend to be costly financially as well. It cost money to repair or replace things that break down. When people suffer injuries or illnesses people may incur medical bills which can add up quickly. If they lose a job, they lose income. When people incur these extra expenses, it can cause them to fall behind on monthly obligations and people may need to turn to credit cards to keep up and before they know it they may be overwhelmed with debt.

Basics of Chapter 13 bankruptcy

It may not seem like people may ever be able to rid themselves of the debt, but people do have options. One of those options is Chapter 13 bankruptcy. This option is mainly for people who want to keep their property after the divorce and also have the ability to make payments towards their debt. Unlike Chapter 7 bankruptcy, people do not need to liquidate assets.

Filing for bankruptcy can be overwhelming, particularly when an Illinois resident does not understand the process. They may hear terms related to bankruptcy and experience confusion when they attempt to understand what it all means. Readers should understand that the information contained in this post does not provide any legal advice and the best answers that they can get to their bankruptcy questions may come from bankruptcy attorneys.

However, one important concept that readers can learn about before filing for bankruptcy is liquidation. This post will only touch on the topic and further inquiry is encouraged for those who are considering filing for Chapter 7 bankruptcy.

Selling off property to satisfy creditors

Chapter 7 bankruptcy's liquidation provisions are premised off the idea that those who use Chapter 7 bankruptcy do not have disposable income to use to pay off their debts. Unlike Chapter 13 bankruptcy, which reorganizes an individual's income so that they may pay down their debts, Chapter 7 bankruptcy presumes that a debtor has no extra money with which to use to reduce their outstanding financial obligations.

The old adage of the only things guaranteed in life are death and taxes continue to be as true today as it ever was before. And, the realities of death have never been more acute than they have been in recent memory. This is why we often get questions from business owners about the best timing for estate planning.

When is the best time to estate plan for business owners?

Now! We never know how many days we have left on Earth. That is simply a fac of life. But, think about the effect the sudden loss of an owner or even a key employee, who knows all the ins and outs of a business. Think about the chaos that loss will invite. And, think about the family that is left behind to fight over that business. Would it survive? Would those family relationships survive? This is why estate planning, or more accurately, transition planning, is so important for business owners.

Transition planning

Business transition planning is part of the estate planning process for business owners. It is the process whereby the drafter is setting out how they want their business to transfer to the next generation. The goal is simple: ensure that the business survives after one's death by empowering the next generation to take over. This process can actually help one's current business too because it really forces business owners to think about how and why their business is growing and how to keep that momentum.