Illinois Bankruptcy Exemptions

Learn what property you can protect in bankruptcy under Illinois bankruptcy exemption laws.

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If you file for Chapter 7 bankruptcy in Illinois, you can protect some or all of your property with Illinois’ bankruptcy exemptions. The bankruptcy exemptions in Illinois also play a role in Chapter 13 bankruptcy. Read on to learn about what property is covered by Illinois’ bankruptcy exemptions.

For a general overview of bankruptcy exemptions, visit the Bankruptcy Exemption topic page.

Note: Although one court has held that the Illinois Wage Deduction Act creates a bankruptcy exemption, In re Mayer, 288 B.R. 869 (Bankr.N.D.Ill.2008) (Wedoff, J.), most other Illinois courts addressing the issue have found that it does not. In re Radzilowsky, 448 B.R 767 (Bankr.N.D.Ill. May 6, 2011); In re Kapusta, 2011 WL 2173675 (CD. Ill. June 2, 2011); In re Koeneman, 410 B.R. 820 (CD.Ill.2009); In re Thum, 329 B.R. 848 (Bankr.CD.Ill.2005).

Illinois Requires Debtors to Use State Exemptions

Illinois has enacted legislation “opting out” of the federal bankruptcy exemptions. This means that bankruptcy filers in Illinois are only permitted to exempt property using the state laws.

Married Couples May Double Illinois Exemptions

Married couples filing a joint bankruptcy in Illinois may “double” the exemption amount. The effect of this rule is that each spouse may claim the full exemption amount for any property individually owned by that spouse.

Common Illinois Exemptions

Here are some of the most common exemptions available under Illinois law:

Alimony, Support, and Maintenance

You may exempt the amount reasonably necessary for support. 735 ILCS 5/12-1001.

Cemeteries and Burial Funds

You may exempt all pre-need cemetery sales and future care funds. 225 ILCS 45/4a; 760 ILCS 100/4; 815 ILCS 390/16.

Claims for Negligence or Tortious Conduct

You may exempt a payment made to you on account of the wrongful death of a person who was your dependent and up to $15,000 compensation for the personal injury of either yourself or of a person of whom you were dependent.

This exemption extends for two years after the debtor has obtained the right to receive the payments. Property that can be traced back to these payments is exempted for five years after the debtor has received the payment. 735 ILCS 5/12-1001.

Crime Victim’s Compensation

You may exempt 100% of any award given as compensation for a crime.

This exemption extends for two years after the debtor has obtained the right to receive the payments. Property that can be traced back to these payments is exempted for five years after the debtor has received the payment. 735 ILCS 5/12-1001; 740 ILCS 45/18.

Franchise, Permit, and License Interests

You may exempt your liquor permit. 235 ILCS 5/6-1.

Fraternal Benefit Society Benefits

All fraternal benefit society benefits are 100% exempt. 235 ILCS 5/6-1.

Homestead or Residential Property

The homestead exemption protects a certain amount of equity in your home or principal residence. You are allowed to exempt up to $15,000 in a residence, which includes a farm, a lot with buildings, a condominium or cooperative. This exemption also includes proceeds from the sale of a homestead. 735 ILCS 5/12-901 et seq.

For more details about how the homestead exemption works in Illinois, see The Illinois Homestead Exemption.

Insurance Benefits

The proceeds payable to you because of the death of an insured person are 100% exempt.

Endowment policies and annuities payable to a spouse or dependent of the insured are 100% exempt. 215 ILCS 5/238; 735 ILCS 5/12-1001.

Motor Vehicles

You may exempt up to $2,400 in one motor vehicle. 735 ILCS 5/12-1001.

To learn more about the Illinois Motor Vehicle exemption, visit The Illinois Motor Vehicle Exemption in Bankruptcy.

Partnership Property

Illinois has enacted the Uniform Partnership Act, which exempts a partner’s interest in specific property. 805 ILCS 205/25.

Pension and Retirement Benefits

You may exempt 100% of your pension and retirement benefits. 40 ILCS 5/7-217; 735 ILCS. 5/12-1006.

Personal Property

You may exempt the following personal property:

  • Necessary wearing apparel is 100% exempt.
  • The Bible and school books are 100% exempt.
  • Family pictures of you and your family are 100% exempt.
  • Professionally prescribed health aids.
  • A certificate of title to any a watercraft over 12 feet in length is 100% exempt.
  • Illinois College Savings Pool accounts invested more than 1 year before filing if belowfederal gift tax limit, or 2 years before filing if above. 735 ILC 5/12-1001(j).

625 ILCS 45/3A-7; 735 ILCS 5/12-1001.

Public Assistance

All public assistance is 100% exempt. 305 ILCS 5/11-3; 735 ILCS 5/12-1001.

Trade Implements

You may exempt $1,500 in all tools of your trade, including professional books. 735 ILCS 5/12-1001.

Unemployment Compensation

You may exempt 100% of all unemployment compensation except for certain child support claims. 735 ILCS 5/12-1001; 820 ILCS 405/1300.

Wages

You may exempt the following amount of your wages:

  • 85% of your gross earnings; or
  • 45 times the federal minimum hourly wage per week (whichever is greater).

735 ILCS 5/12-803; 740 ILCS 170/4.

Wildcard

$4,000 of any personal property (does not include wages).  735 ILCS 5/12-1001(b).

Worker’s Compensation

All workers compensation is 100% exempt. This includes claims and awards for occupational diseases. 820 ILCS 305/21; 820 ILCS 310/21.

Veteran’s Benefits

All veteran’s benefits are 100% exempt. 735 5/12-1001.

Confirming the Status of Illinois Bankruptcy Exemptions

Illinois’s exemption amounts are adjusted periodically. To make sure you have the most recent figures, be sure to check for any updates at the Illinois General Assembly.

For additional information on how to research and find the latest exemption amounts, see our Legal Research Center.

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