Exemption of Your Home From Creditors

As a bankruptcy lawyer I frequently have people ask me whether they can stop creditors from taking their homes.

This is not a question where one answer fits all though, and while creditors can sometimes take a debtor’s home, there are a number of factors that will stop this from happening in most situations.

One such factor is the homestead exemption under Illinois law. The law allows you to exempt up to $15,000.00 of your home value from creditors. Or in the case of two people owning a home jointly up to $30,000.00.

While there are not many homes in Illinois that are worth less than $30,000.00 keep in mind that other than when dealing with a mortgage foreclosure you only need to protect your equity in the home. Thus a married couple with a jointly owned home worth $300,000.00 home and a $250,000.00 home should be safe. This is because after subtracting out the mortgage and the cost of selling the home (which would normally be more than $20,000.00 for a home of this value) there is less than $30,000.00 of equity which the homeowners need to protect.