Asset Protection – What can I Keep?
For people who have moved:
If you moved from another state within the past two years, it’s very important that you tell us. The Bankruptcy Code requires us to look to your former state of residence to determine what exemptions you can use. Lakelaw can determine the exemptions to which you are entitled no matter where you have lived before. So just tell us and we’ll figure it out for you.
Exemption Planning:
If you are thinking of filing a bankruptcy case, particularly under chapter 7, you might think about acquiring assets which are exempt. This can be tricky, particularly if you acquire the exempt assets with assets which are not otherwise exempt. This course of action could result in your losing your discharge in bankruptcy. Lakelaw’s managing member, David P. Leibowitz, has frequently lectured on Asset Protection in Bankruptcy, particularly as it relates to exemption planning. Exemption planning requires a lot of care and attention to be carried off without objection. It’s very important that you disclose all pre-bankruptcy transactions to your Lakelaw attorney in order to avoid highly unpleasant surprises and consequences from your bankruptcy trustee.
Illinois Exemptions
Here are the most important exemptions under Illinois law:
| Type of Property | Amount of Exemption |
|---|---|
| Residence or homestead of individual. Includes farm, lot and buildings, condominium, mobile home or cooperative. Can be owned or leased. | $15,000 |
| Necessary wearing apparel, bible, school books and family pictures. Prescribed health aids of debtor and dependents. | 100% |
| Any personal property of the debtor | $4,000 |
| One motor vehicle | $2,400 |
| Implements, professional books, tools of trade | $1,500 |
| Proceeds and cash value of life insurance policies and annuity contracts payable to dependent of insured | 100% |
| Public benefits: social security, unemployment compensation, public assistance, veteran’s and disability and illness benefits | 100% |
| Alimony, support or separate maintenance | Amount reasonably necessary to support debtor and dependents. |
| Crime victim’s reparation awards | 100% |
| Wrongful death payments as a result of the death of a person who supported the debtor | Amount reasonably necessary to support debtor. |
| Life insurance payments from a policy insuring a person who supported the debtor | Amount reasonably necessary to support debtor and dependents. |
| Payments on account of bodily injury to the debtor or a person who supported the debtor | $15,000 |
| Gross earnings or disposable earnings (i.e., gross earnings less deductions required by law | 85% of gross earnings OR disposable earnings equal to 45 times the federal minimum hourly wage per week, whichever is greater (Illinois bankruptcy courts are not in full agreement on this point) |
| Proceeds and cash value of life or endowment insurance policy or annuity contract payable to insured’s spouse or dependent | 100% |
| Fraternal Benefit Society’s benefits | 100% |
| Workmen’s compensation benefits | 100% |
| Public welfare benefits | 100% |
| Property held in trust for the debtor | 100% |
| Unemployment compensation benefits | 100% (support claims excepted) |
| Retirement funds (tax qualified plans or plans in good faith established as tax qualified plans) | 100% |
