The state of Illinois currently has an exemption level, called a "homestead exemption," of $15,000 meaning that a Chapter 7 trustee cannot touch the first $15,000 of equity in a debtor's house, and that amount is increased to $30,000 for married couples filing bankruptcy jointly. The question then is, how much more equity beyind the exempt amount will result in a sale of your residence by the trustee. It will depend on the trustee, but here is the formula that is usually used. First, the trustee will subtract 10% of the estimated value of your residence for brokerage and closing expenses. Next, the trustee will subtract the outstanding loan amount on the property. The trustee will then also subtract the applicable exemption amount, whether it be $15,000 or $30,000. If the amount reamining is greater than $5000 or so, the trustee will typically be inclined to at least entertain the idea of selling the property. For a further evaluation, please contact our experienced bankruptcy attorneys for a free consultation.
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