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Illinois Debt and Bankruptcy Guide
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llinois Exemptions
Illinois Statutory Exemptions from Debts
 
 
In both chapter 7 and chapter 13 bankruptcies the consumer is allowed to keep certain property. These are called exemptions. A consumer, in a chapter 7 case, can keep all property that is "exempt" under Illinois law. Federal law also has exemptions, and in some states you can use both, but Illinois has "opted out" of using the federal exemptions, so in Illinois you can only use the Illinois exemptions.
 
In  a chapter 13 case, the consumer can keep all of their property IF the chapter 13 plan meets bankruptcy law requirements. Mortgages and certain "secured" loans may need to be repaid if you want to keep that property.
State Exemptions are governed by 735 ILCS 5/12–1001  and deals with personal property exemptions. 
The exemptions are:
  • Necessary wearing apparel;
  • $4,000 worth of any other property.  This is called the "wild card exemption" because the debtor has the right to choose the exempt property.  It could be a bank account, a tax refund, household furniture and furnishings, jewelry, furs, collections, or anything or any combination of things as long as the total value does not exceed $4,000;
  • $2,400 worth of equity in one motor vehicle.  If your client owns a car worth $40,000 but owes $39,000 on it, it cannot be taken.  However, a $6,000 car which the client owns free and clear is at risk, at least theoretically. Note also that the $4000 "wild card" exemption can be "stacked" on top of the $2,400 motor vehicle exemption to create a $6,400 equity exemption of a motor vehicle;
  • Tools of the trade of the debtor which do not exceed $1,500;
  • Life insurance proceeds payable to a wife or husband or to a child, parent, or other person dependent upon the deceased;
  • Income from social security, unemployment compensation, public assistance, veteran’s benefits, disability or illness payments and alimony or support payments reasonably necessary for the support of the debtor and any of the debtor’s dependents;
  • A payment of up to $15,000 for personal injury; and
  • 735 ILCS 5/12–901 is the Illinois Homestead Exemption statute.  It provides the owner/occupier of a home (which includes condominiums and mobile homes) with a $15,000 exemption.  If your client owns a $250,000 house with a $245,000 mortgage, he cannot lose it to his creditors or a bankruptcytrustee (as long as he is current in his mortgage payments).  However, the $35,000 used mobile home which the client just finished paying off may be taken either by creditors, or by the trustee.  Upon the sale of the property, the client would be awarded his homestead exemption, $15,000, and the balance of the proceeds would be used to pay the creditors.

Alimony, Support or Maintenance 735 ILCS 5 §12-1001(g)(4)

Crime Victim's Reparation Awards 735 ILCS 5 §§12-1001(h)(1), (i)

Earnings (Gross) 735 ILCS 5 §12-803 85% 85%

Financial Aid and Child Care 305 ILCS 5 §11-3

Fraternal Benefit Society 215 ILCS 5 §299.1a

Health Aids 735 ILCS 5 §12-1001(e)

Homestead 735 ILCS 5 §12-901 15,000.00 30,000.00

Insurance - Life 735 ILCS 5 §12-1001(h)(3)

Insurance - Life (Proceeds to Spouse,Dep.) 215 ILCS 5 §238

Insurance - Life (Proceeds) 735 ILCS 5 §12-1001(f)

Liquor Permits 735 ILCS 5 §6-1

Motor Vehicle (1) 735 ILCS 5 §12-1001(c) 2,400.00 4,800.00

Partnership Property 805 ILCS 205 §25(c)

Personal Bodily Injury 735 ILCS 5 §12-1001(h)(4) 15,000.00 30,000.00

Restitution Payments - Civil Lib. Act 735 ILCS 5 §12-1001(g)(5)

Retirement - Fire, Police, Etc. 40 ILCS 5 §§22-230, 4-135, 6-213, 19-117

Retirement - Pension 735 ILCS 5 §12-1006(a)

Retirement - Pension - Benefits 735 ILCS 5 §12-704

Social Security, Unemp. Compensation, Etc. 735 ILCS 5 §§12-1001(g)(1),(2),(3)

Tools of Trade 735 ILCS 5 §12-1001(d) 1,500.00 3,000.00

Unemployment Compensation 820 ILCS 405 §1300(B)

Wearing Apparel, Books, Pictures 735 ILCS 5 §12-1001(a)

Wildcard - Any Personal Property 735 ILCS 5 §12-1001(b) 4,000.00 8,000.00

Workmens Compensation 820 ILCS 305 §21

Wrongful Death (for support) 735 ILCS 5 §12-1001(h)(2)