Bankruptcy protection is a federal process, but if you live in Illinois, you will use state bankruptcy exemptions and federal non bankruptcy exemptions. Federal non bankruptcy exemptions are laws that protect government benefits from creditors. They are not part of the bankruptcy code, but bankruptcy filers in Illinois may take both state bankruptcy exemptions and federal non bankruptcy exemptions.
Illinois Bankruptcy Exemptions at a Glance
Homestead Exemption allows $15,000 for individuals/$30k for joint filers.
Motor vehicle exemption of $2,400
Wildcard Exemption $4,000
Tools of the Trade $1,500
Limited personal property exemption
Certain retirement accounts
Federal Non Bankruptcy Exemptions
There are many federal non bankruptcy exemptions – some are very niche exemptions while others are applicable to a larger segment of the population. The more commonly used federal non bankruptcy exemptions:
Government employees’ death and disability benefits
Civil service workers’ retirement
Tenancy by the entirety protection available in some jurisdictions
IRS tax-exempt retirement accounts
COVID-19 stimulus payments
Percentage of income earnings
Social Security benefits
If you are considering bankruptcy protection it is important to work with an experienced bankruptcy lawyer to explore the full list of federal non bankruptcy exemptions that may be available to you. Your attorney will maximize your exemptions so that you can keep more of your property while discharging unsecured debt. Chapter 7 or 13 personal bankruptcy protection offers people in a difficult financial situation a chance at a fresh start. Contact bankruptcy lawyer Charles E Covey to discuss your case today.