There are many contributing factors that are associated with financial troubles. Some common reasons include overwhelming debt, divorce, sudden unemployment, sudden illness, or home foreclosure.

In fact, the average credit card debt in Illinois is a whopping $5,632 per person. In addition, foreclosure rates are also as staggering, one out of every 1,351 IL homes is currently in foreclosure.

If you have found yourself in similar situations, then you are more than likely struggling with other personal issues that come with dealing with debt. The fear of losing your automobile, house or your money can drain a person emotionally. You may have even considered Filing for Bankruptcy .

If you are thinking “Can I File Bankruptcy?” you are certainly not alone. Almost 1 million people file bankruptcy each year in the US. Bankruptcy is a means created by the US Government to help struggling Americans find relief from overwhelming debt. You may want to consider personal bankruptcy if it’s best for you.

What Is Bankruptcy?

Bankruptcy provides people with the chance to get out from underneath considerable debt while still working with lenders in a legal capacity. It is started by a person filing a Petition with their nearest bankruptcy court. The Petition can be filed by an individual or by spouses jointly. When the bankruptcy is settled, the filer will ‘exit’ and will have a chance for a fresh start on their finances.

During a bankruptcy, a trustee is appointed to oversee the deatils of the matter. His or her duties differ and depend on whether the individual has filed for Chapter 7 or Chapter 13 bankruptcy.

Did you know that Illinois ranks #4 in the nation for bankruptcy filings. In 2017 the number of personal bankruptcies was approximately 470 out of every 100,000 residents.

What Is The Difference Between Chapter 7 And Chapter 13?

People in Illinois, who claim bankruptcy, will elect to file under Chapter 13 or Chapter 7 of the U.S. Bankruptcy Code. Want to know the difference? Take a look at the descriptions below for more information:

Chapter 7

In exchange for dissolving all past due debts, the trustee of the bankruptcy will liquidate the assets, such as cars, homes, and other property of value in a Chapter 7 Bankruptcy proceeding.

Debtors that were listed on the bankruptcy filing will be repaid with the proceeds collected during liquidation

Chapter 13

A Chapter 13 Bankruptcy plan is reserved for people who have the means to pay some of their debts through a restructuring. You will be allowed to keep your valuable assets over a 3- to 5-year period.

In order to determine which type of bankruptcy an individual can file, they will have to determine their ability to repay under the Bankruptcy Means Test.

What Is A Bankruptcy Means Test?

The goal of the Bankruptcy Means Test is to determine who is eligible to apply for debt forgiveness through a Chapter 7 Bankruptcy. It takes into account your:

  • income and expenses
  • household size and composition
  • debt-to-income ratio

For those who do not qualify for a Chapter 7 filing, he or she will be able to file for Chapter 13, as described above.

What Are Bankruptcy Exemptions?

Specific states have certain exclusions that are enacted by congress as federal bankruptcy exemptions for filers. These exemptions will determine what you are able to retain throughout and after Chapter 7. In a Chapter 13 situation, the exemptions will determine what amount you will have to pay certain financial institutions in your repayment plan.

Unless otherwise noted, all law references are to the  Illinois Compiled Statutes.


  • Real or personal property, including farms, lots, buildings, condos, co-ops or mobile homes up to $15,000 in equity. A spouse or child of a deceased owner can claim homestead. Sale proceeds can also be exempted, with conditions. With some limitations, Illinois recognizes tenancy by the entirety, and if you hold property in this manner, you might be able to protect additional equity from some creditors.

Personal Property

  • Motor vehicle up to $2,400; clothing needed; health aids; school books; family pictures; bible; personal injury recoveries up to $15,000; wrongful death recoveries; proceeds from sale of exempt property; Illinois College Savings Pool accounts that were invested more than 1 year before filing if below federal gift tax limit, or 2 years before filing if above the federal gift tax limit.


  • Either a minimum 85% of earned but unpaid wages or 45 times the higher of the state and federal minimum hourly wage, whichever is greater. A judge may approve more for a low-income debtor. Some judges may not allow the wage exemption due to a case law conflict .


  • Tax exempt retirement accounts (including 401(k)s, 403(b)s, profit-sharing and money purchase plans, SEP and SIMPLE IRAs, and defined benefit plans).
  • IRAS and Roth IRAs (check current cap).
  • General assembly members.
  • Police officers.
  • Firefighters.
  • Municipal employees.
  • County employees.
  • Civil service employees.
  • Park employees.
  • Sanitation district employees.
  • State employees.
  • State university employees.
  • Teachers.
  • Judges.
  • House of correction employees.
  • Public library employees.
  • Disabled firefighters, and widows and children of firefighters.
  • ERISA-qualified benefits and IRAs. As well as public employees.

Public Benefits

  • Aid to blind, aged, and disabled; public assistance, including earned income tax credit and child tax credit
  • Veterans’ benefits; Social Security; unemployment compensation; crime victims’ compensation; restitution payments for World War II relocation of Japanese Americans and Aleuts.
  • Workers’ compensation.
  • Workers’ occupational disease compensation.

Tools of Trade

  • Tools, books, and implements of trade up to $1,500.
  • National Guard uniforms and arms.

Alimony and Child Support

  • Alimony and child support needed for support.


  • Life insurance, annuity, or cash value if the beneficiary is spouse, child, parent, or another dependent of the beneficiary.
  • Fraternal benefit society benefits.
  • Health and disability benefits; life insurance proceeds needed for support if the beneficiary is spouse or child.


  • Specific business partnership property.


  • Any other personal property up to $4,000 (not including wages).

Want to know if you can include Student Loans in Bankruptcy or Medical Bills in Bankruptcy? Check out our Bankruptcy FAQ’s section.

Filing Bankruptcy Alone vs. Filing With An Attorney

You are not required by law to hire an attorney to declare bankruptcy. People are allowed to represent him or herself as a pro se debtor. You will simply contact the local bankruptcy court and obtain all forms and requirements directly through them. Filing alone is not an easy task.

Filing Bankruptcy without an Attorney

A simple Chapter 7 proceeding that doesn’t have a lot of debtors or assets may be easy to manage on your own.

A basic bankruptcy that doesn’t involve an attorney might look like:.

  • Your income is below the state median;
  • You have no property;
  • Your debts will be considered dis-chargeable.

Working With An Attorney

For most people, it is usually in one’s best interest to work with a bankruptcy attorney. A bankruptcy attorney is there to represent you and not the creditors.

An attorney is also accustomed with exemption laws. In addition, they can come up with creative strategies to keep your assets through practical repayment strategies that are fair to everyone involved.

While you may have the fight and ability to manage a Bankruptcy on your own, it tends to make things a lot easier on an already stressful situation, especially when there is so much at stake.

What Does Bankruptcy Include?

Once you file for bankruptcy in IL, the courts put in place an order called an Automatic Stay. This order will stop debt collection calls, wage garnishments, and additional claims. Keep in mind that payments regarding child support and criminal cases will still need to be made during this time.

In any event, Bankruptcy will be able to include:

  • credit card debt
  • protection from eviction
  • avoidance of foreclosure
  • utility bills
  • medical expenses

Again, unless you are filing a complex Chapter 13 case, you will lose all assets associated with a Chapter 7 Bankruptcy protection. You will, however, be able to prevent any and all collections from occurring as long as they were incurred before the date of filing and discharge.

Final Thoughts And Considerations On Filing For Bankruptcy In Illinois

As you can see, there a lot of information associated with successfully filing for bankruptcy and then exiting it unscathed or satisfied. Only a licensed bankruptcy attorney can guide you through this arduous process, particularly when it comes to complex cases. Be sure to hire someone you respect and trust.

Bankruptcy Courts In Illinois

Paul Findley Federal Building and United States Courthouse
600 East Monroe Street
Springfield,IL 62701
Illinois Central Bankruptcy Court

Federal Building
100 N.E. Monroe Street
Peoria,IL 61602
Illinois Central Bankruptcy Court

United States Courthouse
201 South Vine Street
Urbana,IL 61801
Illinois Central Bankruptcy Court

United States Courthouse
301 West Main Street
Benton,IL 62812
Illinois Southern Bankruptcy Court

Melvin Price Federal Building and United States Courthouse
750 Missouri Avenue
East St. Louis,IL 62201
Illinois Southern Bankruptcy Court


Additional Illinois Resources

Foreclosure Help Program

Disability SSDI Benefits