Can I choose federal rather than state exemptions when filing in Illinois?
Get Legal Help Today
Secured with SHA-256 Encryption
UPDATED: Mar 9, 2020
It’s all about you. We want to help you make the right legal decisions.
We strive to help you make confident insurance and legal decisions. Finding trusted and reliable insurance quotes and legal advice should be easy. This doesn’t influence our content. Our opinions are our own.
Editorial Guidelines: We are a free online resource for anyone interested in learning more about legal topics and insurance. Our goal is to be an objective, third-party resource for everything legal and insurance related. We update our site regularly, and all content is reviewed by experts.
An individual filing Chapter 7 bankruptcy in the state of Illinois must only choose exemptions based on state laws. He or she cannot revert to use of federal laws for exemption purposes, as can be done in some other states. Illinois does not recognize federal exemptions. State exemption laws take full precedence in every Chapter 7 case, so in Illinois bankruptcy cases, anyone filing must be aware of what the state rules are and how they apply to his or her specific case.
Illinois Bankruptcy Exemptions
Under Chapter 7 bankruptcy, most items that the debtor owns, as well as cash in his bank accounts, will be turned over to the court and sold in a bankruptcy sale in order to generate money to repay some of the debts that are owed. However, items that fall within Illinois bankruptcy exemptions are kept by the debtor and not sold.
Examples of Illinois bankruptcy exemptions include:
- Individuals may keep equity in an automobile up to $2400.
- Up to $15,000 of real property value is exempt (including farms, property, condos, buildings, homes).
- Unoccupied property may be claimed exempt under the homestead declaration.
Those filing bankruptcy in Illinois may also choose not to include certain debts in the bankruptcy so they may keep the items associated with those debts. For example, in nearly all cases, the individual may have his or her real estate mortgages and any other secured loans exempted from the Chapter 7 bankruptcy, if he or she so chooses, so that he may keep the house, car or other assets that are acting as collateral. Of course, payments must continue on these secured debts throughout the proceedings in order for the individual to keep the items in question.
To understand how these Illinois exemptions will apply in your specific bankruptcy proceeding, it is in your best interests to get advice from an experienced Illinois bankruptcy lawyer and to work with an attorney throughout the entire bankruptcy process.