Can I choose federal rather than state exemptions when filing in Illinois?

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Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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UPDATED: Jul 15, 2021

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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.  


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