February 8, 2019
You won't lose everything when filing for bankruptcy in Illinois. You'll be able to use Illinois's bankruptcy exemptions to protect the things you'll need to work and live, such as your home, personal items, and a retirement account.
Learn more in Filing Bankruptcy in Illinois.
Some states allow residents to choose between the state and the federal bankruptcy exemptions, but that option isn't available in Illinois. You'll use Illinois's state exemptions and, if helpful, the federal nonbankruptcy exemptions.
Here are some of the more common exemptions in Illinois. When reviewing them, you'll want to keep these things in mind:
735-5/12-901-902; 750-65/22 - Equity in real or personal property, including farms, lots, buildings, condos, co-ops or mobile homes up to $15,000. A spouse or child of a deceased owner can claim a homestead. Sale proceeds can also be exempted, with conditions (735-5/12-906). In some instances, you might be able to protect additional equity if you hold the property in tenancy by the entirety.
735-5/12-1001 – Equity in one motor vehicle up to $2,400.
735-5/12-1001(b) - Any personal property up to $4,000. You can't use the Illinois wildcard exemption to protect real estate or wages.
735-5/12-1001 - Necessary clothing; 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 one year before filing if below federal gift tax limit, or two years before filing if above the federal gift tax limit.
11 U.S.C. § 522; 735-5/12-1006 - 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); IRAS and Roth IRAs to the maximum amount. (This amount is set by federal law. See Federal Bankruptcy Exemptions for updates on this dollar amount.)
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 - Public employees.
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 the Trade
735-5/12-1001 - Tools, books, and implements of trade up to $1,500.
20-1805/10 - National Guard uniforms and arms.
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 a spouse or child.
805-205/25 - Specific business partnership property.
735-5/12-1001(g)(4) - Alimony and child support needed for support.
Add any applicable federal nonbankruptcy exemptions.
Some people can keep all assets, but that isn't always true. Here's what will happen to nonexempt property:
You'll learn more about Chapter 7 and 13 in Which Type of Bankruptcy is Right for Me?
This list includes the majority of bankruptcy exemptions available in Illinois. However, doesn't include all exemptions. Also, states often create qualification requirements for specific exemptions, and Illinois might have changed the amounts since this list was last updated. Check the Illinois Compiled Statutes or with a local bankruptcy lawyer.
To learn more about bankruptcy exemptions, the state exemption system, and the homestead exemption rules, read Bankruptcy Exemptions – What Can I Keep When I File for Bankruptcy?