When a debtor files for chapter 7 or chapter 13 bankruptcy, they are allowed certain protections under the bankruptcy code. Among the protections, are exemptions to exempt certain assets from becoming property of the bankruptcy estate. Illinois has opted out of the federal exemptions, providing a list of asset protections granted by state law. The Illinois homestead exemption law provides the bankrupt debtor protection of up to $15,000 of the equity in their residence in Illinois. ...

7th Circuit Case In re: Belcher, No. 07-2174 (12/31/08). Appeal, S.D. Ill. Rev'd.Dist. Ct. erred in finding that bankrupt debtor was eligible for homestead exemption under 735 ILCS 5/12-901 even though said debtor was not named on title of marital home shared by spouse, who was titleholder to said home and who had also filed for bankruptcy. Under Ill. caselaw, debtor must have formalized property interest to claim homestead exemption. In Illinois, the...