Exemptions Which Prevent Creditors From Taking Your Money or Property

Exemptions Which Prevent Creditors From Taking Your Money or Property

Last updated: February 2015

What Are Your Exemption Rights?
            Exempt Personal Property
            Other Exempt Property
Putting Money From An Exempt Source In The Bank
How To Claim Your Exemption Rights


In Illinois, the law protects some of your income and property from collection by creditors. No one can force you to pay debts from money or property which is exempt. The exemption laws allow you to keep the basic necessities of life. This section identifies the money and property which the law says are protected against seizure by creditors. These exemptions give debtors very important rights. These are especially important when a creditor with a judgment against you tries to seize your property. It is important to know that a creditor cannot make you give up your exemption rights. A creditor may try to do this by putting it into a contract. Contract terms that say you are giving up your exemptions are illegal under federal law.

Exemption laws do not protect debtors when a creditor wants to take a piece of property which is under a security interest. This security interest is also called collateral. For example, a car may be collateral for a car loan. This means that if you are not able to pay the loan, the loaning company can take the car. This could not be stopped by exemption laws.

What Are Your Exemption Rights?

Some of your exemption rights are elsewhere. For information on how much of your paycheck is exempt see How Creditors Can Collect Court Judgments. For information on how much of your home is exempt see Judgment Liens and Enforcement of the Judgments Against Real Estate. This section focuses on your rights to exemption of personal property other than wages. Exempt property is property which is protected under the law from collection on a judgment or from attachment by creditors.

Exempt Personal Property

The following personal property is exempt from collection or attachment:

  • Your or your family's clothing, bible, school books and family pictures.
  • Up to $4,000 in value of any other property of your choice. This is called the "wildcard" exemption because you can use it to keep one or more items exempt. For example, if a creditor tries to garnish your bank account which has $500 in it, you can claim the entire account as coming within your wildcard exemption. That means you are left with another $3,500 to exempt other personal property. Also, only your equity interest in the property is counted towards the $4,000 limit. For example you may want to use the wildcard exemption to protect your car. If it is worth $5,000 but you still owe $4,000 on it, you only have $1,000 of equity in the car. Since your equity interest is less than the amount of the wildcard exemption, you can use the wildcard to totally exempt your car. You also can use the $4,000 wildcard to add exemption value to other exemptions shown below.
  • Your interest in any one motor vehicle, up to $2,400. You may want to use your exemption rights to protect your car. Even if your equity interest (car value - what you owe on the car) in the car is more than $2,400, you can use your wildcard exemption to protect more of the value.
  • Any implements, professional books, or tools of your trade, up to $1,500 in value. Again, only your equity interest (value - what you owe on the property) in this property counts towards the $1500 limit.
  • Your right to receive certain types of government benefits or assistance. This exemption covers government benefits such as Social Security income, unemployment insurance, public aid, veteran's benefits, and other forms of public assistance. Your right to receive circuit breaker property tax relief benefits is also exempt.
  • Any disability, illness, or unemployment benefit from an employer, an insurance company, or any other source. This exemption includes workmen's compensation benefits.
  • Your right to receive alimony, maintenance, or support payments. This includes payments for your support or the support of any dependent.
  • Your right and interest in a retirement plan, such as a pension or annuity.

Other Exempt Property

The following other forms of property are exempt from collection or attachment:

  • Money you receive from a life insurance policy after the insured person dies.
  • Money you receive from a wrongful death lawsuit of a person who supported you.
  • Money you receive because of an injury you suffered (up to $7,500).
  • Money you receive as an award under the crime victim's compensation law.
  • Money owed to you from property you sold if the property was exempt when you sold it. 

In addition to this list of exemptions, there may be other exemptions which you are entitled to under the law.

Putting Money From An Exempt Source In The Bank

Money that comes from an exempt source remains exempt even when it is put into a bank account. For example, if you receive a monthly check from Social Security, you can deposit the money in the bank and it is still exempt. However, you need to be able to show that all of the money in the account is exempt in order to protect it. If the account has exempt and non-exempt money in it, the exempt money is more difficult to protect. If you keep your money in a bank, you should have a separate account for any money from exempt sources. Do not put non-exempt money into that account.

How To Claim Your Exemption Rights

A creditor may try to make you pay on a judgment using special collection tools like a Citation To Discover Assets or the garnishment process (See How Creditors Can Collect Court Judgments) . If a creditor uses special collection tools, you should talk to a lawyer. However, you may need to go to court to exercise your rights if the creditor tries to collect exempt money. Any notice you receive must tell you about your exemption rights. The notice also must tell you how to get a hearing. If the creditor does not send you notices, try to get the notice from the creditor's lawyer or from the court.

You typically can get a hearing by coming to court on the day that the notice says court will be held next in your case (called the "return date"). Ask the clerk to call your case. You can get a sooner date if you ask the Clerk of the Circuit Court in writing before the date on the citation or garnishment notice. The Clerk of the Circuit Court will give you a date and time to appear before a particular judge. The Clerk of the Circuit Court will also give you the necessary forms which you must prepare and send to the creditor and to any garnishee. These forms tell the creditor and garnishee when and where the hearing will be. The garnishee is the person, bank, or employer holding property which the creditor is trying to get. You may need to get to court sooner because your bank account has been frozen. This means the bank will not allow you to take any money out of your account. 
At the hearing, tell the judge which property you believe is exempt. Bring any documents or other proof to support what you are saying.  You should also tell the judge the reason why you believe the property is exempt.

If you received a Citation to Discover Assets, you were required to tell the creditor about your income and assets. You should tell the creditor which items you listed are exempt. You also should tell the creditor how you are going to use your $4,000 wildcard exemption. Do not allow the creditor or the creditor's attorney to present a turn-over order to the judge before you have had an opportunity to review that order. Tell the judge if it appears that the order seems to turn-over property which you have identified as exempt.

If all of your income is exempt, do not agree to pay.  Even if you do agree, you cannot be forced to pay. Do not let the creditor trick you.

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