In Illinois, the law says you get to keep certain property so you can still live your life, care for your family, and go to work. These protected items are called “exemptions.” 

What are exemptions?

An exemption is a legal protection.

It means:

• That item does not go to your creditors
• The bankruptcy court cannot take it to pay old bills

In both Chapter 7 and Chapter 13 :

• Exempt property is protected, and
• Only non-exempt property might be sold (in Chapter 7) or affect how much you pay in a plan (in Chapter 13).

💡 Many people who file Chapter 7 in Illinois keep everything they own because their things fit inside these exemptions.

What you can keep

Your home

The law protects $50,000 in home equity if you own your home by yourself and $100,000 in home equity if you own your home with someone else (like a spouse).    

To find out how much equity you have in your home, check your home's current value and how much you currently owe on your mortgage.  The difference between these two numbers is your home equity (current value - amount owed on mortgage).

Your car

The law protects $3,600 in equity in your car.  

To find out how much equity you have in your car, check the Kelley Blue Book current value of your car and how much you owe on your car loan.  The difference between these two numbers is the equity you own in your car (current value - amount owed on car loan). 

Your tools for work

You can protect $2,250 of tools you use for work (tools of the trade). This includes tools, books, or equipment you use to earn a living — so you can keep working after bankruptcy.

Your household items

Creditors usually can’t take an item unless it’s worth more than $5,000 by itself. This includes furniture, electronics, appliances, and pets.  

You can also keep one piece of jewelry worth up to $5,000.

Your retirement accounts

Retirement and pension accounts are protected.

Your money from government benefits and support payments

Government benefits and support payments are also protected when you file for bankruptcy, including:

• Social security,
• Unemployment compensation,
• Public assistance,
• Veteran's benefits,
• Disability or illness payments,
• Alimony or child support that are reasonably necessary, and
• Earned income tax credits.

$4,000 in property you choose

You have a $4,000 wildcard exemption to protect any personal property, such as:

• A bank account,
• Tax refund,
• Equity in your car over $3,600, or
• A piece of jewelry or other household item over $5,000.

You decide how to use it. You can split up your wildcard among different things, as long as the total amount protected with the wildcard is no more than $4,000.  

💡 Keep in mind: This is general information, not legal advice. If you’re considering bankruptcy, talk to a qualified Illinois bankruptcy lawyer or legal aid organization. They can help you understand how the new exemptions fit your exact situation.