Legal Question in Bankruptcy in Illinois

Re: illinois bankruptcy question

She would loose her house in a Chapter 7, but not in a Chapter 13. Under a Ch13 she would have to pay some of the debt through a trustee. Please contact me if you have any other questions. [email protected]

Re: illinois bankruptcy question

In Illinois the homestead exemption is only $15,000 per bankruptcy debtor. As a result, there would still be $30,000 of equity in the home. A chapter 7 would result in the house being liquidated. If she were to file a chapter 13, she would keep the house but would have to pay as much as the equity in the house (minus the homestead exemption) into the plan. That should be more affordable than paying the debt outright as she would not be paying interest through a chapter 13, but you don't mention how much money she actually has every month.

If her budget is tight and she can't afford a chapter 13, she might want to look into a reverse mortgage. I am no expert on reverse mortgages, but from what I know about them, they might not be a bad option in your mother's situation.