Thursday, July 7, 2011

Illinois bankruptcy exemptions

Alimony, support, and separate maintenance. 735 ILCS 5/12-1001(g)(4). 100-percent exempt to the extent reasonably necessary for support.

Cemeteries and burial funds. 225 ILCS 45/4a; 760 ILCS 100/4; 815 ILCS 390/16.

Claims for negligence or tortious conduct. 735 ILCS 5/12-1001. A debtor may exempt a payment on account of the wrongful death of an individual of whom the debtor was a dependent and up to $15,000 compensation for personal bodily injury of the debtor or of a person on whom the debtor was dependent; the right to receive such an award is exempt for up to two years after it accrues; funds traceable to such an award are exempt for five years after accrual.

Crime victim’s compensation. 735 ILCS 5/12-1001(h); 740 ILCS 45/18. The right to receive such an award is exempt for two years after it accrues; proceeds traceable to such an award are exempt for up to five years after accrual.

Disability or illness benefit. 735 ILCS 5/12-1001(g)(3). 100-percent exempt.

Franchise, permit, and license interests. 235 ILCS 5/6-1. Liquor permits are exempt.

Fraternal benefit society benefits. 215 ILCS 5/299.1a. All exempt.

Homeless person’s savings account. 310 ILCS 80/5. 100-percent exempt.

Homestead on residential property. 735 ILCS 5/12-901. A debtor may exempt up to $15,000 in a residence consisting of a farm, a lot of land and buildings thereon, a condominium or a cooperative, or personal property such as a mobile home used as a homestead. The proceeds from sale of the homestead are also exempt. In a joint bankruptcy case, the maximum is $30,000.

Illinois College Savings Pool funds. 735 ILCS 5/12-1001(j). Most moneys held in an account invested in the Illinois College Savings Pool of which the debtor is a participant or donor are exempt. The statute provides exceptions for (1) contributions made with the actual intent to hinder, delay, or defraud any creditor of the debtor; (2) contributions made within a year prior to the date of filing that, in the aggregate, exceed the amount of the annual gift tax exclusion under Internal Revenue Code §2503(b); and (3) contributions made during the period commencing 730 days prior to and ending 366 days prior to the date of filing of the debtor’s petition that, in the aggregate, exceed the amount of the annual gift tax exclusion under Internal Revenue Code §2503(b).

Insurance benefits. 215 ILCS 5/238; 735 ILCS 5/12-1001(f). Proceeds payable because of the death of the insured and the aggregate net cash value of life or endowment policies and annuities payable to a spouse or dependent of the insured are exempt.

Motor vehicles. 735 ILCS 5/12-1001(c). $2,400 in one motor vehicle.

Partnership property. 805 ILCS 206/203. Under the Uniform Partnership Act (1997), 805 ILCS 206/100, et seq., property acquired by a partnership is property of the partnership and not of the partners individually.

Pensions and retirement benefits. 40 ILCS 5/7-217; 735 ILCS 5/12-1006. A debtor’s right to receive pensions, annuities, benefits, distributions, refunds of contributions, or other payments is exempt in certain circumstances. Pension plans include stock bonus, pension, profit-sharing, annuity, or similar plans or arrangements, including a 401(k) retirement plan for self-employed individuals or a simplified employee pension plan, a government or church retirement plan or contract, an individual retirement annuity or individual retirement account, and a public employee pension plan created under the Illinois Pension Code, 40 ILCS 5/1‑101, et seq.

Personal property. 625 ILCS 45/3A-7; 735 ILCS 5/12-1001(a) through 5/12-1001(e). 100-percent necessary wearing apparel, family Bible, school books, professionally prescribed health aids, and family pictures of the debtor and the debtor’s family, and $4,000 in any other property. Certificates of title in watercraft of more than 12 feet in length are also exempt.

Public assistance. 305 ILCS 5/11-3; 735 ILCS 5/12-1001(g)(1). 100-percent exempt. Some Illinois bankruptcy courts have held that the portion of a debtor’s income tax refund attributable to the earned income credit is a public assistance payment. This issue is not settled.

Social security. 735 ILCS 5/12-1001(g)(1). 100-percent exempt.

Spendthrift trusts. 205 ILCS 665/14.

Tenancy by the entireties. 735 ILCS 5/12-112; 750 ILCS 65/22; 765 ILCS 1005/1c. 100-percent exempt unless a joint creditor.

Trade implements. 735 ILCS 5/12-1001(d). $1,500 in trade implements, including professional books.

Unemployment compensation. 735 ILCS 5/12-1001(g)(3); 820 ILCS 405/1300. 100-percent, subject to certain child support claims.

Wages. 735 ILCS 5/12-803; 740 ILCS 170/4. Exempt, except for the lesser of 15 percent of weekly disposable earnings or the amount by which such earnings exceed 45 times minimum wage.

Workers’ compensation. 820 ILCS 305/21, 310/21. 100-percent exempt.

Veterans’ benefits. 735 ILCS 5/12-1001(g)(2). 100-percent exempt.

Certain of the exemptions listed above are limited in time pursuant to 735 ILCS 5/12-1001(h).

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