Avoid Mistakes When Planning and Filing Illinois Bankruptcy Cases

The best-planned bankruptcy cases go unnoticed. A few debtors glide through the system without attracting attention and receive full discharges in record time. Luck is not involved, but rather each successful debtor begins planning strategically a few weeks or months in advance. These debtors know something that you don’t.

Free - 2010 Bankruptcy Strategies Explained

Illinois Bankruptcy Laws - Release, Waiver & Conveyance

Sec. 12‑904. "Release, waiver or conveyance. No release, waiver or conveyance of the estate so exempted shall be valid, unless the same is in writing, signed by the individual and his or her spouse, if he or she have one, or possession is abandoned or given pursuant to the conveyance; or if the exception is continued to a child or children without the order of a court directing a release thereof; but if a conveyance is made by an individual as grantor to his or her spouse, such conveyance shall be effectual to pass the title expressed therein to be conveyed thereby, whether or not the grantor in such conveyance is joined therein by his or her spouse. In any case where such release, waiver or conveyance is taken by way of mortgage or security, the same shall only be operative as to such specific release, waiver or conveyance; and when the same includes different pieces of land, or the homestead is of greater value than $7,500, the other lands shall first be sold before resorting to the homestead, and in case of the sale of such homestead, if any balance remains after the payment of the debt and costs, such balance shall, to the extent of $7,500 be exempt, and be applied upon such homestead exemption in the manner provided by law."

Operation of Illinois bankruptcy laws

In practice, creditors may file objections with Illinois bankruptcy courts regarding the extent of the exemption, designation, and liens which arise through operation of law. Illinois bankruptcy courts are wary of all sales to insiders before and during the pendency of all cases. Also, home improvement loans which draw down equity before filing are scrutinized under both the state fraudulent conveyance statutes and federal fraudulent conversion statutes. A trustee, creditor, party in interest, or the court on it's own motion may file objections.

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