Illinois Bankruptcy Exemptions

Laws which protect a debtor’s property when personal bankruptcy is filed in the state of Illinois.

(735 ILCS 5/12-901) Sec. 12-901. Amount.
Every individual is entitled to an estate of homestead to the extent in value of $15,000 of his or her interest in a farm or lot of land and buildings thereon, a condominium, or personal property, owned or rightly possessed by lease or otherwise and occupied by him or her as a residence, or in a cooperative that owns property that the individual uses as a residence. That homestead and all right in and title to that homestead is exempt from attachment, judgment, levy, or judgment sale for the payment of his or her debts or other purposes and from the laws of conveyance, descent, and legacy, except as provided in this Code or in Section 20-6 of the Probate Act of 1975. This Section is not applicable between joint tenants or tenants in common but it is applicable as to any creditors of those persons. If 2 or more individuals own property that is exempt as a homestead, the value of the exemption of each individual may not exceed his or her proportionate share of $30,000 based upon percentage of ownership.
(735 ILCS 5/12-902) Sec. 12-902. Exemption after death or desertion.
Such exemption shall continue after the death of such individual, for the benefit of the spouse surviving, so long as he or she continues to occupy such homestead, and of the children until the youngest child becomes 18 years of age; and in case the spouse deserts his or her family, the exemption shall continue in favor of the one occupying the premises as a residence.
(735 ILCS 5/12-906) Sec. 12-906. Proceeds of sale.
When a homestead is conveyed by the owner thereof, such conveyance shall not subject the premises to any lien or incumbrance to which it would not be subject in the possession of such owner; and the proceeds thereof, to the extent of the amount of $15,000, shall be exempt from judgment or other process, for one year after the receipt thereof, by the person entitled to the exemption, and if reinvested in a homestead the same shall be entitled to the same exemption as the original homestead.
(735 ILCS 5/12-1001) Sec. 12-1001. Personal property exempt.
The following personal property, owned by the debtor, is exempt from judgment, attachment, or distress for rent:

(a) The necessary wearing apparel, bible, school books, and family pictures of the debtor and the debtor’s dependents;
(b) The debtor’s equity interest, not to exceed $4,000 in value, in any other property;
(c) The debtor’s interest, not to exceed $2,400 in value, in any one motor vehicle;
(d) The debtor’s equity interest, not to exceed $1,500 in value, in any implements, professional books, or tools of the trade of the debtor;
(e) Professionally prescribed health aids for the debtor or a dependent of the debtor;
(f) All proceeds payable because of the death of the insured and the aggregate net cash value of any or all life insurance and endowment policies and annuity contracts payable to a wife or husband of the insured, or to a child, parent, or other person dependent upon the insured, whether the power to change the beneficiary is reserved to the insured or not and whether the insured or the insured’s estate is a contingent beneficiary or not;
(g) The debtor’s right to receive:

(1) a social security benefit, unemployment compensation, or public assistance benefit;
(2) a veteran’s benefit;
(3) a disability, illness, or unemployment benefit; and
(4) alimony, support, or separate maintenance, to the extent reasonably necessary for the support of the debtor and any dependent of the debtor.

(h) The debtor’s right to receive, or property that is traceable to:

(1) an award under a crime victim’s reparation law;
(2) a payment on account of the wrongful death of an individual of whom the debtor was a dependent, to the extent reasonably necessary for the support of the debtor;
(3) a payment under a life insurance contract that insured the life of an individual of whom the debtor was a dependent, to the extent reasonably necessary for the support of the debtor or a dependent of the debtor;
(4) a payment, not to exceed $15,000 in value, on account of personal bodily injury of the debtor or an individual of whom the debtor was a dependent; and
(5) any restitution payments made to persons pursuant to the federal Civil Liberties Act of 1988 and the Aleutian and Pribilof Island Restitution Act, P.L. 100-383.
For purposes of this subsection (h), a debtor’s right to receive an award or payment shall be exempt for a maximum of 2 years after the debtor’s right to receive the award or payment accrues; property traceable to an award or payment shall be exempt for a maximum of 5 years after the award or payment accrues; and an award or payment and property traceable to an award or payment shall be exempt only to the extent of the amount of the award or payment, without interest or appreciation from the date of the award or payment.

(i) The debtor’s right to receive an award under Part 20 of Article II of this Code relating to crime victims’ awards. (j) Moneys held in an account invested in the Illinois College Savings Pool of which the debtor is a participant or donor, except the following non-exempt contributions:

(1) any contribution to such account by the debtor as participant or donor that is made with the actual intent to hinder, delay, or defraud any creditor of the debtor;
(2) any contributions to such account by the debtor as participant during the 365 day period prior to the date of filing of the debtor’s petition for bankruptcy that, in the aggregate during such period, exceed the amount of the annual gift tax exclusion under Section 2503(b) of the Internal Revenue Code of 1986, as amended, in effect at the time of contribution; or
(3) any contributions to such account by the debtor as participant during the period commencing 730 days prior to and ending 366 days prior to the date of filing of the debtor’s petition for bankruptcy that, in the aggregate during such period, exceed the amount of the annual gift tax exclusion under Section 2503(b) of the Internal Revenue Code of 1986, as amended, in effect at the time of contribution.
For purposes of this subsection (j), “account” includes all accounts for a particular designated beneficiary, of which the debtor is a participant or donor.
Money due the debtor from the sale of any personal property that was exempt from judgment, attachment, or distress for rent at the time of the sale is exempt from attachment and garnishment to the same extent that the property would be exempt had the same not been sold by the debtor.
If a debtor owns property exempt under this Section and he or she purchased that property with the intent of converting nonexempt property into exempt property or in fraud of his or her creditors, that property shall not be exempt from judgment, attachment, or distress for rent. Property acquired within 6 months of the filing of the petition for bankruptcy shall be presumed to have been acquired in contemplation of bankruptcy.
The personal property exemptions set forth in this Section shall apply only to individuals and only to personal property that is used for personal rather than business purposes. The personal property exemptions set forth in this Section shall not apply to or be allowed against any money, salary, or wages due or to become due to the debtor that are required to be withheld in a wage deduction proceeding under Part 8 of this Article XII.
(740 ILCS 170/4) Sec. 4.
The maximum wages, salary, commissions, and bonuses that may be collected by an assignee for any work week shall not exceed the lesser of (1) 15% of such gross amount paid for that week or (2) the amount by which disposable earnings for a week exceed 45 times the Federal Minimum Hourly Wage prescribed by Section 206(a)(1) of Title 29, U.S.C., as amended, or the minimum hourly wage prescribed by Section 4 of the Minimum Wage Law, whichever is greater, in effect at the time the amounts are payable. This provision (and no other) applies irrespective of the place where the compensation was earned or payable and the State where the employee resides. No amounts required by law to be withheld may be taken from the amount collected by the creditor. The term “disposable earnings” means that part of the earnings of any individual remaining after the deduction from those earnings of any amounts required by law to be withheld. If there is more than one assignment demand received by the employer, the assignees shall collect in the order or priority of service of the demand upon the employer, but the total of all collections shall not exceed the amount that could have been collected if there had been one assignment demand.Benefits and refunds payable by pension or retirement funds or systems, any assets of employees held by those funds or systems, and any moneys an employee is required to contribute to those funds or systems are exempt and are not subject to a wage assignment under this Act. A fee of $12 for each wage assignment shall be collected by and paid to the employer and the amount so paid shall be credited against the amount of the wage-earner’s outstanding debt.

(40 ILCS 5/2-154) (General Assembly Members)
Sec. 2-154. Assignment. Except as provided in this Article, all moneys in the fund created by this Article, and all securities and other property of the System, and all annuities and other benefits payable under this Article, and all accumulated contributions and other credits of participants in this system, and the right of any person to receive an annuity or other benefit under this Article, or a refund or return of contributions, shall not be subject to judgment, execution, garnishment, attachment or other seizure by process, in bankruptcy or otherwise, nor to sale, pledge, mortgage or other alienation, and shall not be assignable. However, a person receiving an annuity or benefit, or refund or return of contributions, may authorize withholding from such annuity, benefit, refund or return of contributions in accordance with the provisions of the “State Salary and Annuity Withholding Act”, approved August 21, 1961, as now or hereafter amended.
The General Assembly finds and declares that the amendment to this Section made by this amendatory Act of 1989 is a clarification of existing law, and an indication of its previous intent in enacting and amending this Section. Notwithstanding Section 1-103.1, application of this amendment shall not be limited to persons in service on or after the effective date of this amendatory Act of 1989.
(40 ILCS 5/3-144.1) (Police Officers)
Sec. 3-144.1. All pensions, refunds or disability pension benefits granted under this Article, and every portion thereof, shall be exempt from attachment or garnishment process and shall not be seized, taken, subjected to, detained or levied upon by virtue of any judgment, or any process or proceedings whatsoever issued out of or by any court for the payment and satisfaction in whole or in part of any debt, damage, claim, demand or judgment against a pensioner, refund applicant or other beneficiary hereunder.
(40 ILCS 5/4-135)
Sec. 4-135. Benefits – Exempt. No portion of the pension fund shall, either before or after a board’s order of distribution to any retired firefighter or his or her beneficiaries, be held, seized, taken subject to, or detained or levied on by virtue of any process, injunction interlocutory or other order or judgment, or any process or proceeding whatever issued by any court of this State, for the payment or satisfaction in whole or in part of any debt, damages, claim, demand or judgment against any firefighter or his or her beneficiaries, but the fund shall be held, secured and distributed for the purposes of pensioning such firefighter and beneficiaries and for no other purposes whatever.
(40 ILCS 5/5-218) (Police Officers)
Sec. 5-218. Annuities, etc. Exempt. All pensions, annuities, refunds or disability benefits granted under this Article, and every portion thereof, are exempt from attachment or garnishment process and shall not be seized, taken, subjected to, detained or levied upon by virtue of any judgment, or any process or proceeding whatsoever issued out of or by any court for the payment and satisfaction in whole or in part of any debt, damage, claim, demand, or judgment against a pensioner, annuitant, refund applicant or other beneficiary hereunder.
pensioner, annuitant, refund applicant or disability beneficiary has a right to transfer or assign his or her pension, annuity, refund or disability benefit or any part thereof by mortgage or otherwise, except that a pensioner or annuitant may direct in writing that payment be made monthly, in a fixed amount, for hospitalization purposes.
The board, in its discretion, may pay to the wife or unmarried minor child of an annuitant, pensioner, refund applicant or disability beneficiary, such amount out of the annuity, pension, refund or disability benefit as a court may order, or such amount as the board may consider necessary for the support of such wife or child (or both) in the event of his disappearance or unexplained absence or his failure to support his wife or child, or both. The board may also withhold from any future annuity, pension, refund or disability benefit payments such amount, or amounts, as it may, in its discretion, set for the purpose of repayment of any moneys paid to an annuitant, pensioner, refund applicant or disability beneficiary through misrepresentation, fraud or error; provided that when any pension or annuity is claimed to have been paid erroneously to a policeman who retired prior to the effective date and the policeman has subsequently re-entered the service and resumed contributions to the fund, no part of any future annuity or disability benefit payable to him when he again becomes separated from the service shall be retained or withheld for repayment into the fund of any deficiency due from him on account of any pension or annuity prior to such re-entry if such original pension or annuity was paid without any misrepresentation by the policeman as to his age or period of service in the procuring of such prior pension. Any authorized action taken by the board shall relieve and release the board and the fund from any liability for any moneys retained or paid out as herein provided.
Whenever money is payable to a minor or to a person adjudged to be under legal disability to manage or care for his own estate, the board may, in its discretion when to the apparent interest of the minor or person under legal disability, waive guardianship proceedings and pay such money to the person providing for or caring for the minor, and to the wife, parent or blood relative providing or caring for the person under legal disability. Whenever a pensioner, annuitant, refund applicant or disability beneficiary disappears or his whereabouts are unknown and it cannot be ascertained whether or not he is living, there shall be paid to his wife or his children, or both, under this section, such amount only as will not be in excess of the amount which would be payable in the event the pensioner, annuitant, refund applicant or disability beneficiary had died on the date of his disappearance; and, in the event of his subsequent return, or upon satisfactory proof of his being alive, the amount theretofore paid shall be charged against any moneys payable to him under any of the provisions of this Article to the same effect as though the payment to his wife or children, or both, had been an allowance to her or them out of the moneys payable to him as such pensioner, annuitant, refund applicant or disability beneficiary.
(40 ILCS 5/6-213) (Firefighters)
Sec. 6-213. Annuities, etc., Exempt. All pensions, annuities, refunds and disability benefits granted under this Article and every portion thereof, are exempt from attachment or garnishment process and shall not be seized, taken, subjected to, detained, or levied upon by virtue of any judgment or any process or proceeding whatsoever entered or issued by or out of any court in this State, for the payment and satisfaction in whole or in part of any debt, damage, claim, demand, or judgment against any pensioner, annuitant, applicant for a refund or other beneficiary hereunder.
No pensioner, annuitant, applicant for a refund, disability beneficiary or other beneficiary has a right to transfer or assign his or her pension, annuity, refund or disability benefit or any part thereof by mortgage or otherwise, except that an annuitant or disability beneficiary may direct in writing that a monthly payment be made to such association or organization with which he or his widow may be affiliated by virtue of his fire service, or for hospitalization insurance purposes.
An annuitant may execute under oath a written waiver of his right to receive all or any part of his annuity. The waiver shall take effect upon being filed with the board and shall be irrevocable. The annuity shall thereupon be permanently reduced by the amount waived. The board, in its discretion, however, may pay to the wife of any above stated person, such proportion of her husband’s annuity, pension, refund or disability benefit as a court may order, or such an amount as the board may consider necessary for her support or for the support of herself and the children, in the event of his failure to provide such support. The board may also retain out of any future annuity, pension, refund or disability benefit payment such amount or amounts, as it may in its discretion set for the purpose of repayment into this fund of any moneys paid to such person through misrepresentation, fraud or error. Any action herein provided to be taken by the board shall, when taken, release the board and the fund from any liability for any moneys retained or paid out as herein provided.
Whenever any annuity, pension, refund or disability benefit is payable to a minor or to a person adjudged to be under legal disability, the board in its discretion when to the apparent interest of such minor or person under legal disability may waive guardianship proceedings and pay such money to the person providing for or caring for such minor and to the wife, parent or blood relative providing or caring for such person under legal disability. Whenever a pensioner, annuitant, applicant for refund or disability beneficiary disappears or his whereabouts are unknown and it cannot be ascertained whether or not he is living, there shall be paid to his wife under this section the amount which would be payable to her in the event her fireman husband had died on the date of his disappearance. In the event of his subsequent return, or upon satisfactory proof of his being alive, the amount theretofore paid to his wife shall be charged against any moneys payable to him under any of the provisions of this Article as though such payment to his wife had been an allowance to her out of the moneys payable to him as such pensioner, annuitant, applicant for refund or disability beneficiary.
(40 ILCS 5/7-217) (Municipal Employees)
Sec. 7-217. Payment of benefits and assignments.

(a) Except as otherwise provided in this Section, all moneys in the Fund created by this Article, and all securities and other property of the Fund, and all annuities and other benefits payable under this Article, and all accumulated contributions and other credits of employees in this Fund, and the right of any person to receive an annuity or other benefit under this Article, or a refund or return of contributions, shall not be subject to judgment, execution, garnishment, attachment, or other seizure by process, in bankruptcy or otherwise, nor to sale, pledge, mortgage or other alienation, and shall not be assignable. Notwithstanding Section 1-103.1, the changes in this Section made by this amendatory Act of 1991 shall not be limited to persons in service on or after its effective date. All annuities and other benefits payable under this Fund and all accumulated credits of employees in the Fund shall be exempt from state and municipal taxes.
(40 ILCS 5/8-244) (Municipal Employees)
Sec. 8-244. Annuities, etc., exempt.

(a) All annuities, refunds, pensions, and disability benefits granted under this Article, shall be exempt from attachment or garnishment process and shall not be seized, taken, subjected to, detained, or levied upon by virtue of any judgment, or any process or proceeding whatsoever issued out of or by any court in this State, for the payment and satisfaction in whole or in part of any debt, damage, claim, demand, or judgment against any annuitant, pensioner, participant, refund applicant, or other beneficiary hereunder.
(40 ILCS 5/9-228) (County Employees)
Sec. 9-228. Attachment; withholding.

(a) The annuities, pensions, refunds, and disability benefits granted under this Article shall be exempt from attachment or garnishment process and shall not be seized, taken, subjected to, detained, or levied upon by virtue of any judgment, or any process or proceeding whatsoever issued out of or by any court in this State, for the payment and satisfaction in whole or in part of any debt, damage, claim, demand, or judgment against any annuitant, pensioner, person entitled to a refund, or other beneficiary hereunder.
(b) No annuitant, pensioner, person entitled to a refund, or other beneficiary shall have any right to transfer or assign his annuity or disability benefit or any part thereof by way of mortgage or otherwise except that an annuitant or a widow annuitant who elects to participate in any group hospitalization plan or group medical surgical plan shall have the right to authorize the Board to deduct the cost to him of such plan from the annuity check and to pay such deducted amount to the group insurance carrier, provided, however, that the Board in its discretion may terminate such right; provided, that the board in its discretion may pay to the wife of any annuitant, pensioner, refund applicant, or disability beneficiary such an amount out of her husband’s annuity, pension, refund, or disability benefit as any court may order, or such an amount as the board may consider necessary for the support of his wife or children or both in the event of his disappearance or unexplained absence or his failure to support such wife or children.
(c) The board may retain out of any future annuity, pension, refund or disability benefit payments, such amount, or amounts, as it may require for the repayment of any moneys paid to any annuitant, pensioner, refund applicant, or disability beneficiary through misrepresentation, fraud or error. Any such action of the board shall relieve and release the board and the fund from any liability for any moneys so withheld.
(d) Whenever an annuity, pension, refund, or disability benefit is payable to a minor or to a person adjudged to be under legal disability, the board, in its discretion and when to the best interest of the person concerned, may waive guardianship proceedings and pay the annuity, pension, refund or benefit to the person providing or caring for the minor and to the wife, parent or blood relative providing or caring for the person.
(e) An annuitant may authorize the withholding of a portion of his annuity for payment of dues to any labor organization designated by the annuitant; however, no portion of annuities may be withheld pursuant to this subsection for payment to any one labor organization unless a minimum of 100 annuitants authorize such withholding, except that the Board may allow such withholding for less than 100 annuitants during a probationary period of between 3 and 6 months, as determined by the Board. The Board shall prescribe a form for the authorization of such withholding, and shall provide such forms to employees, annuitants and labor organizations upon request. Amounts withheld by the Board under this subsection shall be promptly paid over to the designated organizations.
Any such labor organization shall have access to the Fund’s mailing list of annuitants, upon such terms as the Board may approve. The expenses of any mailing conducted by the labor organization shall be borne by the labor organization.
(40 ILCS 5/11-223) (Civil Service Employees)
Sec. 11-223. Annuities, etc., exempt.

(a) All annuities, refunds, pensions, and disability benefits granted under this Article shall be exempt from attachment or garnishment process and shall not be seized, taken, subjected to, detained, or levied upon by virtue of any judgment, or any process or proceeding whatsoever issued out of or by any court in this State, for the payment and satisfaction in whole or in part of any debt, damage, claim, demand, or judgment against any annuitant, participant, refund applicant, or other beneficiary hereunder.
No annuitant, refund applicant, or other beneficiary may transfer or assign his annuity, refund, or disability benefit or any part thereof by way of mortgage or otherwise, except as provided in Section 11-223.1, and except in the case of refunds, when a participant has pledged by assignment, power of attorney, or otherwise, as security for a loan from a legally operating credit union making loans only to participants in certain public employee pension funds described in the Illinois Pension Code, all or part of any refund which may become payable to him in the event of his separation from service. The board in its discretion may, however, pay to the wife or to the unmarried child under 18 years of age of any annuitant, refund applicant, or disability beneficiary, such an amount out of her husband’s annuity refund, or disability benefit as any court may order, or such an amount as the board may consider necessary for the support of his wife or children or both in the event of his disappearance or unexplained absence or of his failure to support such wife or children.
(b) The board may retain out of any future annuity, refund, or disability benefit payments such amount or amounts as it may require for the repayment of any moneys paid to any annuitant, pensioner, refund applicant, or disability beneficiary through misrepresentation, fraud or error. Any such action of the board shall relieve and release the board and the fund from any liability for any moneys so withheld.
(c) Whenever an annuity or disability benefit is payable to a minor or to a person certified by a medical doctor to be under legal disability, the board, in its discretion and when it is in the best interest of the person concerned, may waive guardianship or conservatorship proceedings and pay the annuity or benefit to the person providing or caring for the minor or person under legal disability.
In the event that a person certified by a medical doctor to be under legal disability (i) has no spouse, blood relative, or other person providing or caring for him or her, (ii) has no guardian of his or her estate, and (iii) is confined to a Medicare approved, State certified nursing home or to a publicly owned and operated nursing home, hospital, or mental institution, the Board may pay any benefit due that person to the nursing home, hospital, or mental institution, to be used for the sole benefit of the person under legal disability.
Payment in accordance with this subsection to a person, nursing home, hospital, or mental institution for the benefit of a minor or person under legal disability shall be an absolute discharge of the Fund’s liability with respect to the amount so paid. Any person, nursing home, hospital, or mental institution accepting payment under this subsection shall notify the Fund of the death or any other relevant change in the status of the minor or person under legal disability.
(d) Whenever an annuitant, applicant for refund or disability beneficiary disappears and his whereabouts are unknown, and it cannot be ascertained that he is alive, there shall be paid to his wife or children or both such amount as will not be in excess of the amount payable to them in the event such annuitant, applicant for refund or disability beneficiary had died on the date of disappearance. If he returns, or upon satisfactory proof of his being alive, the amount theretofore paid to such beneficiaries shall be charged against any moneys payable to him under this Article as though such payment to such beneficiaries had been an allowance to them out of the moneys payable to the employee as an annuitant, applicant for refund or disability beneficiary.
(40 ILCS 5/12-190) (Park Employees)
Sec. 12-190. Annuities etc. Exempt.

(a) All pensions, annuities, refunds or disability benefits granted under this Article, and every portion thereof, are exempt from any State or municipal tax, and exempt from attachment or garnishment process and shall not be seized, taken, subjected to, detained or levied upon by virtue of any judgment, or any process or proceeding whatsoever issued out of or by any court for the payment and satisfaction in whole or in part of any debt, damage, claim, demand or judgment against a pensioner, annuitant, refund applicant or other beneficiary hereunder.
(40 ILCS 5/13-805) (Sanitation District Employees)
Sec. 13-805. Annuities and benefits exempt. All annuities and benefits granted under this Article shall be exempt from attachment or garnishment process and shall not be seized, taken, subjected to, detained, or levied upon by virtue of any judgment, or any process or proceeding whatsoever issued out of or by any court, for the payment and satisfaction in whole or in part of any debt, damage, claim, demand, or judgment against any annuitant or other beneficiary hereunder.
(40 ILCS 5/14-147) (State Employees)
Sec. 14-147. Annuities, etc. – Exempt.

text
Updated
Sec. 14-147. Annuities, etc. – Exempt. Except as provided in this Article, all moneys in the fund created by this Article, and all securities and other property of the System, and all annuities and other benefits payable under this Article, and all accumulated contributions and other credits of employees in this System, and the right of any person to receive an annuity or other benefit under this Article, or a refund or return of contributions, shall not be subject to judgment, execution, garnishment, attachment, or other seizure by process, in bankruptcy or otherwise, nor to sale, pledge, mortgage or other alienation, and shall not be assignable. A person receiving an annuity or benefit, or refund or return of contributions, may authorize withholding from such annuity, benefit, refund or return of contributions in accordance with the provisions of the “State Salary and Annuity Withholding Act”, approved August 21, 1961, as now or hereafter amended.
The General Assembly finds and declares that the amendment to this Section made by this amendatory Act of 1989 is a clarification of existing law, and an indication of its previous intent in enacting and amending this Section. Notwithstanding Section 1-103.1, application of this amendment shall not be limited to persons in service on or after the effective date of this amendatory Act of 1989.
(40 ILCS 5/15-185) (State University Employees)
Sec. 15-185. Annuities, etc., Exempt. The accumulated employee and employer contributions shall be held in trust for each participant and annuitant, and this trust shall be treated as a spendthrift trust. Except as provided in this Article, all cash, securities and other property of this system, all annuities and other benefits payable under this Article and all accumulated credits of participants and annuitants in this system and the right of any person to receive an annuity or other benefit under this Article, or a refund of contributions, shall not be subject to judgment, execution, garnishment, attachment, or other seizure by process, in bankruptcy or otherwise, nor to sale, pledge, mortgage or other alienation, and shall not be assignable. The board, however, may deduct from the benefits, refunds and credits payable to the participant, annuitant or beneficiary, amounts owed by the participant or annuitant to the system. No attempted sale, transfer or assignment of any benefit, refund or credit shall prevent the right of the board to make the deduction and offset authorized in this Section. Any participant or annuitant may authorize the board to deduct from disability benefits or annuities, premiums due under any group hospital-surgical insurance program which is sponsored or approved by any employer; however, the deductions from disability benefits may not begin prior to 6 months after the disability occurs.
(40 ILCS 5/16-190) (Teachers)
Sec. 16-190. Annuities, etc., Exempt. The right of a person to a retirement annuity or other benefit, to the return of contributions, the retirement annuity or other benefit itself, any optional benefit, any other right accrued or accruing to any person under the provisions of this Article, and the moneys in the fund created by this Article, shall be subject neither to attachment, garnishment, execution, or other seizure by process, nor to sale, pledge, mortgage or other alienation, and shall not be assignable except as in this Article provided. A person receiving an annuity or benefit may authorize withholding from such annuity or benefit for the purposes enumerated in the “State Salary and Annuity Withholding Act”, approved August 21, 1961, as now or hereafter amended. The moneys in the fund are exempt from any state or municipal tax.
(40 ILCS 5/17-151) (Teachers)
Sec. 17-151. Annuities, etc. Exempt. All pensions, annuities, refunds, or death benefits granted under the provisions of this Article are exempt from State and municipal taxes and are exempt from attachment or garnishment process. They shall not be seized or levied upon by virtue of any judgment or any process or proceedings issued out of or by any court for the payment or satisfaction in whole or in part of any debt, claim, damage, demand or judgment.
No pensioner has the right to transfer or assign his pension or any part thereof by way of mortgage or otherwise except for the purpose (1) of establishing and maintaining membership in nonprofit group health or hospital plans approved by the Board and (2) of establishing a living trust, the trustee of which is authorized to engage in the trust business, provided all pension payments so assigned are required to be paid monthly to the trustor or, in the event of his incapacity, expended for his benefit. The Board is hereby authorized to administer all the details involved in establishing and maintaining membership in such health or hospital plans for the benefit of the annuitants, but it shall not be obligated to do so or to continue doing so, if in its judgment such continuance is not desirable.
(40 ILCS 5/18-161) (Judges)
Sec. 18-161. Annuities, etc. Exempt. Except as provided in this Article, all moneys in the fund created by this Article, and all securities and other property of the System, and all annuities and other benefits payable under this Article, and all accumulated contributions and other credits of participants in this System, and the right of any person to receive an annuity or other benefit under this Article, or a refund or return of contributions, shall not be subject to judgment, execution, garnishment, attachment, or other seizure by process, in bankruptcy or otherwise, nor to sale, pledge, mortgage or other alienation, and shall not be assignable. A person receiving an annuity or benefit, or refund or return of contributions, may authorize withholding from such annuity, benefit, refund or return of contributions in accordance with the provisions of the “State Salary and Annuity Withholding Act”, approved August 21, 1961, as now or hereafter amended.
The General Assembly finds and declares that the amendment to this Section made by this amendatory Act of 1989 is a clarification of existing law, and an indication of its previous intent in enacting and amending this Section. Notwithstanding Section 1-103.1, application of this amendment shall not be limited to persons in service on or after the effective date of this amendatory Act of 1989.
(40 ILCS 5/19-117) (House of Correction Employees)
Sec. 19-117. Exemptions-Assignments.

All annuities granted under the provisions of this Division shall be exempt from attachment and garnishment process and no annuitant shall have the right to transfer or assign his or her annuity either by way of mortgage or otherwise.
(40 ILCS 5/19-218) (Public Library Employees)
Sec. 19-218. Annuities exempt from execution – Assignments prohibited. All annuities granted under the provisions of “The 1905 Act” or this Division shall be exempt from attachment and garnishment process, and no annuitant shall have the right to transfer or assign his or her annuity, either by way of mortgage or otherwise.
(40 ILCS 5/22-230) (Disabled Firefighters)
Sec. 22-230. Fund exempt from seizure. No portion of the pension fund shall, either before or after its order of distribution by such Board of Trustees to such disabled or retired members of the fire insurance patrol or to the surviving spouse or such minor child or children of the deceased, be held, seized, taken, subject to, or detained or levied on by virtue of any judgment, interlocutory or other order, or any process or proceeding whatever of or issued by any court of this State for the payment or satisfaction in whole or in part of any debt, damages, claim, demand or judgment against such member or surviving spouse or minor child or children but the fund shall be kept secure and distributed for the purpose of pensioning the persons named in this Division, and for no other purpose whatsoever.
(110 ILCS 979/45)
Sec. 45. Illinois prepaid tuition contracts.

(a) The Commission may enter into an Illinois prepaid tuition contract with a purchaser under which the Commission contracts on behalf of the State to pay full tuition and mandatory fees at an Illinois public university or Illinois community college for a qualified beneficiary to attend the MAP-eligible institution to which the qualified beneficiary is admitted. Each contract shall contain terms, conditions, and provisions that the Commission determines to be necessary for ensuring the educational objectives and sustainable financial viability of the Illinois prepaid tuition program.
(b) Each contract shall have one designated purchaser and one designated qualified beneficiary. Unless otherwise specified in the contract, the purchaser owns the contract and retains any tax liability for its assets only until the first distribution of benefits. Contracts shall be purchased in units of 15 credit hours at any MAP-eligible institution.
(c) Without exception, benefits may be received by a qualified beneficiary of an Illinois prepaid tuition contract no earlier than 3 years from the date the contract is purchased.
(d) A prepaid tuition contract shall contain, but is not limited to, provisions for (i) refunds or withdrawals in certain circumstances, with or without interest or penalties; (ii) conversion of the contract at the time of distribution from accrued prepayment value at one type of MAP-eligible institution to the accrued prepayment value at a different type of MAP-eligible institution; (iii) portability of the accrued value of the prepayment value for use at an out-of-state higher education institution; (iv) transferability of the contract benefits within the qualified beneficiary’s immediate family; and (v) a specified benefit period during which the contract may be redeemed.
(e) Each Illinois prepaid tuition contract also shall contain, at minimum, all of the following:

(1) The amount of payment or payments and the number of payments required from a purchaser on behalf of a qualified beneficiary. (2) The terms and conditions under which purchasers shall remit payments, including, but not limited to, the date or dates upon which each payment shall be due.
(3) Provisions for late payment charges and for default.
(4) Provisions for penalty fees payable incident to an authorized withdrawal.
(5) The name, date of birth, and social security number of the qualified beneficiary on whose behalf the contract is drawn and the terms and conditions under which the contract may be transferred to another qualified beneficiary.
(6) The name and social security number of any person who may terminate the contract, together with terms that specify whether the contract may be terminated by the purchaser, the qualified beneficiary, a specific designated person, or any combination of these persons.
(7) The terms and conditions under which a contract may be terminated, the name and social security number of the person entitled to any refund due as a result of the termination of the contract pursuant to those terms and conditions, and the method for determining the amount of a refund.
(8) The time limitations, if any, within which the qualified beneficiary must claim his or her benefits through the program.
(9) Other terms and conditions determined by the Commission to be appropriate.

(f) In addition to the contract provisions set forth in subsection (e), each Illinois prepaid tuition contract shall include:

(1) The number of credit hours contracted by the purchaser.
(2) The type of MAP-eligible institution and the prepaid tuition plan toward which the credit hours shall be applied.
(3) The explicit contractual obligation of the Commission to the qualified beneficiary to provide a specific number of credit hours of undergraduate instruction at a MAP-eligible institution, not to exceed the maximum number of credit hours required for the conference of a degree that corresponds to the plan purchased on behalf of the qualified beneficiary.

(g) The Commission shall indicate by rule the conditions under which refunds are payable to a contract purchaser. Generally, no refund shall exceed the amount paid into the Illinois Prepaid Tuition Trust Fund by the purchaser. In the event that a contract is converted from a Public University Plan described in subsection (j) of this Section to a Community College Plan described in subsection (k) of this Section, the refund amount shall be reduced by the amount transferred to the Illinois community college on behalf of the qualified beneficiary. Except where the Commission may otherwise rule, refunds may exceed the amount paid into the Illinois Prepaid Tuition Trust Fund only under the following circumstances:

(1) If the qualified beneficiary is awarded a grant or scholarship at a public institution of higher education, the terms of which duplicate the benefits included in the Illinois prepaid tuition contract, then moneys paid for the purchase of the contract shall be returned to the purchaser, upon request, in semester installments that coincide with the matriculation by the qualified beneficiary, in an amount equal to the current cost of tuition and mandatory fees at the MAP-eligible institution where the qualified beneficiary is enrolled.
(1.5) If the qualified beneficiary is awarded a grant or scholarship while enrolled at either a MAP-eligible nonpublic institution of higher education or an eligible public or private out-of-state higher education institution, the terms of which duplicate the benefits included in the Illinois prepaid tuition contract, then money paid for the purchase of the contract shall be returned to the purchaser, upon request, in semester installments that coincide with the matriculation by the qualified beneficiary. The amount paid shall not exceed the current average mean-weighted credit hour value of the registration fees purchased under the contract.
(2) In the event of the death or total disability of the qualified beneficiary, moneys paid for the purchase of the Illinois prepaid tuition contract shall be returned to the purchaser together with all accrued earnings.
(3) If an Illinois prepaid tuition contract is converted from a Public University Plan to a Community College Plan, then the amount refunded shall be the value of the original Illinois prepaid tuition contract minus the value of the contract after conversion.
No refund shall be authorized under an Illinois prepaid tuition contract for any semester partially attended but not completed.
The Commission, by rule, shall set forth specific procedures for making contract payments in conjunction with grants and scholarships awarded to contract beneficiaries.
Moneys paid into or out of the Illinois Prepaid Tuition Trust Fund by or on behalf of the purchaser or the qualified beneficiary of an Illinois prepaid tuition contract are exempt from all claims of creditors of the purchaser or beneficiary, so long as the contract has not been terminated.
The State or any State agency, county, municipality, or other political subdivision, by contract or collective bargaining agreement, may agree with any employee to remit payments toward the purchase of Illinois prepaid tuition contracts through payroll deductions made by the appropriate officer or officers of the entity making the payments. Such payments shall be held and administered in accordance with this Act.

(h) Nothing in this Act shall be construed as a promise or guarantee that a qualified beneficiary will be admitted to a MAP-eligible institution or to a particular MAP-eligible institution, will be allowed to continue enrollment at a MAP-eligible institution after admission, or will be graduated from a MAP-eligible institution.
(i) The Commission shall develop and make prepaid tuition contracts available under a minimum of at least 2 independent plans to be known as the Public University Plan and the Community College Plan.
Contracts shall be purchased in units of 15 credit hours at either an Illinois public university or an Illinois community college. The minimum purchase amount per qualified beneficiary shall be one unit or 15 credit hours. The maximum purchase amount shall be 9 units (or 135 credit hours) for the Public University Plan and 4 units (or 60 credit hours) for the Community College Plan.
(j) Public University Plan. Through the Public University Plan, the Illinois prepaid tuition contract shall provide prepaid registration fees, which include full tuition costs as well as mandatory fees, for a specified number of undergraduate credit hours, not to exceed the maximum number of credit hours required for the conference of a baccalaureate degree. In determining the cost of participation in the Public University Plan, the Commission shall reference the combined mean-weighted current registration fees from all Illinois public universities.
In the event that a qualified beneficiary for whatever reason chooses to attend an Illinois community college, the qualified beneficiary may convert the average number of credit hours required for the conference of an associate degree from the Public University Plan to the Community College Plan and may retain the remaining Public University Plan credit hours or may request a refund for prepaid credit hours in excess of those required for conference of an associate degree. In determining the amount of any refund, the Commission also shall recognize the current relative credit hour cost of the 2 plans when making any conversion.
Qualified beneficiaries shall bear the cost of any laboratory or other non-mandatory fees associated with enrollment in specific courses. Qualified beneficiaries who are not Illinois residents shall bear the difference in cost between in-state registration fees guaranteed by the prepaid tuition contract and tuition and other charges assessed upon out-of-state students by the MAP-eligible institution.
(k) Community College Plan. Through the Community College Plan, the Illinois prepaid tuition contract shall provide prepaid registration fees, which include full tuition costs as well as mandatory fees, for a specified number of undergraduate credit hours, not to exceed the maximum number of credit hours required for the conference of an associate degree. In determining the cost of participation in the Community College Plan, the Commission shall reference the combined mean-weighted current registration fees from all Illinois community colleges.
In the event that a qualified beneficiary for whatever reason chooses to attend an Illinois public university, the qualified beneficiary’s prepaid tuition contract shall be converted for use at that Illinois public university by referencing the current average mean-weighted credit hour value of registration fees at Illinois community colleges relative to the corresponding value of registration fees at Illinois public universities.
Qualified beneficiaries shall bear the cost of any laboratory or other non-mandatory fees associated with enrollment in specific courses. Qualified beneficiaries who are not Illinois residents shall bear the difference in cost between in-state registration fees guaranteed by the prepaid tuition contract and tuition and other charges assessed upon out-of-state students by the MAP-eligible institution.
(l) A qualified beneficiary may apply the benefits of any Illinois prepaid tuition contract toward a nonpublic institution of higher education. In the event that a qualified beneficiary for whatever reason chooses to attend a nonpublic institution of higher education, the qualified beneficiary’s prepaid tuition contract shall be converted for use at that nonpublic institution of higher education by referencing the current average mean-weighted credit hour value of registration fees purchased under the contract. The Commission shall transfer, or cause to have transferred, this amount, less a transfer fee, to the nonpublic institution on behalf of the beneficiary. In the event that the cost of registration charged to the beneficiary at the nonpublic institution of higher education is less than the aggregate value of the Illinois prepaid tuition contract, any remaining amount shall be transferred in subsequent semesters until the transfer value is fully depleted.
(m) A qualified beneficiary may apply the benefits of any Illinois prepaid tuition contract toward an eligible out-of-state college or university. Institutional eligibility for out-of-state colleges and universities shall be determined by the Commission, but in making those determinations the Commission shall recognize that the benefits of an Illinois prepaid tuition contract may not be used at any postsecondary educational institution that is both operated for-profit and located outside of Illinois. In the event that a qualified beneficiary for whatever reason chooses to attend an eligible out-of-state college or university, the qualified beneficiary’s prepaid tuition contract shall be converted for use at that college or university by referencing the current average mean-weighted credit hour value of registration fees purchased under the contract. The Commission shall transfer, or cause to have transferred, this amount, less a transfer fee, to the college or university on behalf of the beneficiary. In the event that the cost of registration charged to the beneficiary at the eligible out-of-state college or university is less than the aggregate value of the Illinois prepaid tuition contract, any remaining amount shall be transferred in subsequent semesters until the transfer value is fully depleted.
(n) Illinois prepaid tuition contracts may be purchased either by lump sum or by installments. No penalty shall be assessed for early payment of installment contracts.
(o) The Commission shall annually adjust the price of new contracts, in accordance with the annual changes in registration fees at Illinois public universities and community colleges.

(215 ILCS 5/238) (from Ch. 73, par. 850)
Sec. 238. Exemption.

(a) All proceeds payable because of the death of the insured and the aggregate net cash value of any or all life and endowment policies and annuity contracts payable to a wife or husband of the insured, or to a child, parent or other person dependent upon the insured, whether the power to change the beneficiary is reserved to the insured or not, and whether the insured or his estate is a contingent beneficiary or not, shall be exempt from execution, attachment, garnishment or other process, for the debts or liabilities of the insured incurred subsequent to the effective date of this Code, except as to premiums paid in fraud of creditors within the period limited by law for the recovery thereof.
(215 ILCS 5/299.1a) (Section scheduled to be repealed on January 1, 2017)
Sec. 299.1a. Benefits not Attachable.

(a) No money or other charity, relief or aid to be paid, provided or rendered by any society shall be liable to attachment, garnishment or other process or to be seized, taken, appropriated or applied by any legal or equitable process or operation of law to pay any debt or liability of a member or beneficiary, or any other person who may have a right thereunder, either before or after payment by the society.
(305 ILCS 5/11-3) (Aid to aged, blind, disabled; Public Assistance)
Sec. 11-3. Assignment and attachment of aid prohibited. Except as provided below in this Section and in Section 11-3.3, all financial aid given under Articles III, IV, V, and VI and money payments for child care services provided by a child care provider under Articles IX and IXA shall not be subject to assignment, sale, attachment, garnishment, or otherwise. Provided, however, that a medical vendor may use his right to receive vendor payments as collateral for loans from financial institutions so long as such arrangements do not constitute any activity prohibited under Section 1902(a)(32) of the Social Security Act and regulations promulgated thereunder, or any other applicable laws or regulations. Provided further, however, that a medical or other vendor or a service provider may assign, reassign, sell, pledge or grant a security interest in any such financial aid, vendor payments or money payments or grants which he has a right to receive to the Illinois Finance Authority, in connection with any financing program undertaken by the Illinois Finance Authority. Each Authority may utilize a trustee or agent to accept, accomplish, effectuate or realize upon any such assignment, reassignment, sale, pledge or grant on that Authority’s behalf. Provided further, however, that nothing herein shall prevent the Illinois Department from collecting any assessment, fee, interest or penalty due under Article V-A, V-B, V-C, or V-E by withholding financial aid as payment of such assessment, fee, interest, or penalty. Any alienation in contravention of this statute does not diminish and does not affect the validity, legality or enforceability of any underlying obligations for which such alienation may have been made as collateral between the parties to the alienation. This amendatory Act shall be retroactive in application and shall pertain to obligations existing prior to its enactment.
(735 ILCS 5/12-907) (Homeowner’s Insurance)
Sec. 12-907. Insurance proceeds. Whenever a building, exempted as a homestead, is insured in favor of the person entitled to the exemption, and a loss occurs, entitling such person to the insurance, such insurance money shall be exempt to the same extent as the building would have been had it not been destroyed.

(735 ILCS 5/12-1006) Sec. 12-1006. Exemption for retirement plans.

(a) A debtor’s interest in or right, whether vested or not, to the assets held in or to receive pensions, annuities, benefits, distributions, refunds of contributions, or other payments under a retirement plan is exempt from judgment, attachment, execution, distress for rent, and seizure for the satisfaction of debts if the plan (i) is intended in good faith to qualify as a retirement plan under applicable provisions of the Internal Revenue Code of 1986, as now or hereafter amended, or (ii) is a public employee pension plan created under the Illinois Pension Code, as now or hereafter amended.
(b) “Retirement plan” includes the following:

(1) a stock bonus, pension, profit sharing, annuity, or similar plan or arrangement, including a retirement plan for self-employed individuals or a simplified employee pension plan;
(2) a government or church retirement plan or contract;
(3) an individual retirement annuity or individual retirement account; and
(4) a public employee pension plan created under the Illinois Pension Code, as now or hereafter amended.

(c) A retirement plan that is (i) intended in good faith to qualify as a retirement plan under the applicable provisions of the Internal Revenue Code of 1986, as now or hereafter amended, or (ii) a public employee pension plan created under the Illinois Pension Code, as now or hereafter amended, is conclusively presumed to be a spendthrift trust under the law of Illinois.
(d) This Section applies to interests in retirement plans held by debtors subject to bankruptcy, judicial, administrative or other proceedings pending on or filed after August 30, 1989.

(820 ILCS 305/21) (Workers’ Compensation)
Sec. 21. No payment, claim, award or decision under this Act shall be assignable or subject to any lien, attachment or garnishment, or be held liable in any way for any lien, debt, penalty or damages, except the beneficiary or beneficiaries of a deceased employee who was a member or annuitant under Article 14 of the “Illinois Pension Code” may assign any benefits payable under this Act to the State Employees’ Retirement System. The compensation allowed by any award or decision of the Commission shall be entitled to a preference over the unsecured debts of the employer, wages excepted, contracted after the date of the injury to an employee. A decision or award of the Commission against an employer for compensation under this Act, or a written agreement by an employer to pay such compensation shall, upon the filing of a certified copy of the decision or said agreement, as the case may be, with the recorder of the county, constitute a lien upon all property of the employer within the county, paramount to all other claims or liens, except mortgages, trust deeds, or for wages or taxes. Such liens may be enforced in the manner provided for the foreclosure of mortgages under the laws of this State.
(820 ILCS 310/21) (Workers’ Occupational Diseases)
Sec. 21. No payment, claim, award or decision under this Act shall be assignable or subject to any lien, attachment or garnishment, or be held liable in any way for any lien, debt, penalty or damages. The compensation allowed by any award or decision of the Commission shall be entitled to a preference over the unsecured debts of the employer, wages excepted, contracted after the date of the disablement of an employee. A decision or award of the Commission against an employer for compensation under this Act, or a written agreement by any employer to pay such compensation shall, upon the filing of a certified copy of the decision or the agreement, as the case may be, with the recorder of the county, constitute a lien upon all property of the employer within said county, paramount to all other claims or liens, except mortgages, trust deeds, or for wages or taxes. Such liens may be enforced in the manner provided for the foreclosure of mortgages under the laws of this State.

Note: While this reference information is current as of August 2010, it may not reflect the most up-to-date exemption figures on official state of Illinois bankruptcy court statutes.

Back to State of Illinois bankruptcy exemption summary
Back to Bankruptcy Exemptions by State

*The use of partners trademarks are not intended to imply endorsement of these products.

 

 

Ready to Start? Call us at 1(888)214-7773