Illinois Bankruptcy Exemptions

April 10, 2017

Like all states, Illinois has its own set of exemptions that you can use when filing for Chapter 7 or Chapter 13 bankruptcy. Exemptions determine what property (such as a home, car, instrument, retirement account, etc.) you can keep in a Chapter 7 bankruptcy, and how much you must pay to certain creditors in Chapter 13 bankruptcy. Some states allow debtors to choose between the state exemption system and a set of federal bankruptcy exemptions but Illinois is not one of them. In Illinois, you must use the state exemptions below. In addition to this list, you may also use any applicable amounts in the federal nonbankruptcy exemptions.

A married couple filing jointly in Illinois can both claim the full amount of each exemption as long as they each have an ownership interest in the property. This is informally called “doubling.”

To learn more about bankruptcy exemptions, see Bankruptcy Exemptions – What Can I Keep When I File for Bankruptcy? 

Illinois Bankruptcy Exemptions

Unless otherwise noted, all law references are to the Illinois Compiled Statutes.

Homestead

735-5/12-901 - Real or personal property, including farms, lots, buildings, condos, co-ops or mobile homes up to $15,000 in equity. A spouse or child of a deceased owner can claim homestead (735-5/12-902). Sale proceeds can also be exempted, with conditions (735-5/12-906). With some limitations, Illinois recognizes tenancy by the entirety, and if you hold property in this manner, you might be able to protect additional equity from some creditors. (750-65/22).

Personal Property

735-5/12-1001 - Motor vehicle up to $2,400; clothing needed; health aids; school books; family pictures; bible; personal injury recoveries up to $15,000; wrongful death recoveries; proceeds from sale of exempt property; Illinois College Savings Pool accounts that were invested more than 1 year before filing if below federal gift tax limit, or 2 years before filing if above the federal gift tax limit. 

Wages

735-5/12-803 - Either a minimum 85% of earned but unpaid wages or 45 times the higher of the state and federal minimum hourly wage, whichever is greater. A judge may approve more for a low-income debtor. Some judges may not allow the wage exemption due to a case law conflict (because not all jurisdictions follow this rule, you should contact a local attorney for clarification).

Pensions

11 U.S.C. § 522 - Tax exempt retirement accounts (including 401(k)s, 403(b)s, profit-sharing and money purchase plans, SEP and SIMPLE IRAs, and defined benefit plans). 

11 U.S.C. § 522(b)(3)(C)(n) - IRAS and Roth IRAs (check current cap).

40-5/2-154 - General assembly members.

40-5/3-144.1 & 40-5/5-218 - Police officers.

40-5/4-135 & 40-5/6-213 - Firefighters.

40-5/7-217 & 40-5/8-244 - Municipal employees.

40-5/9-228 - County employees.

40-5/11-223 - Civil service employees.

40-5/12-190 - Park employees.

40-5/13-805 - Sanitation district employees.

40-5/14-147 - State employees.

50-5/15-185 - State university employees.

50-5/16-190 & 40-5/17-151 Teachers.

40-5/18-161 - Judges.

40-5/19-117 - House of correction employees.

40-5/19-218 - Public library employees.

40-5/22-230 - Disabled firefighters, and widows and children of firefighters.

735-5/12-1006 - ERISA-qualified benefits and IRAs. As well as public employees.

Public Benefits

305-5/11-3; 735-5/12-1001(g)(1) - Aid to blind, aged, and disabled; public assistance, including earned income tax credit and child tax credit (applies to future payments but not funds already received) (In re Fish, 224 B.R. 82 (Bankr. S.D. Ill 1998); In re Vazquez, No. 13-32174 (Bankr. N.D. Ill 2014); In re Frueh, No. 14–B–81029 (Bankr. W.D. Ill 2014))

735-5/12-1001 - Veterans' benefits; Social Security; unemployment compensation; crime victims' compensation; restitution payments for World War II relocation of Japanese Americans and Aleuts.

820-305-21 - Workers' compensation.

820-310/21 - Workers' occupational disease compensation.

Tools of Trade

735-5/12-1001 - Tools, books, and implements of trade up to $1,500.

20-1805/10 - National Guard uniforms and arms.

Alimony and Child Support

735-5/12-1001(g)(4) - Alimony and child support needed for support.

Insurance

215-5/238 - Life insurance, annuity, or cash value if the beneficiary is spouse, child, parent, or another dependent of the beneficiary.

215-5/299.1a - Fraternal benefit society benefits.

735-5/12-1001 - Health and disability benefits; life insurance proceeds needed for support if the beneficiary is spouse or child.

Misc

805-205/25 - Specific business partnership property.

Wildcard

735-5/12-1001(b) - Any other personal property up to $4,000 (not including wages).

Confirming Exemptions

This list includes the majority of bankruptcy exemptions available in Illinois. However, it may not include all exemptions, and states often create exceptions to specific exemptions. In addition, Illinois may have changed the amounts since this list was last updated. 

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