Illinois Bankruptcy Guide

Complete guide to filing bankruptcy in Illinois, including current median income requirements, Illinois exemptions with homestead protection up to $15,000, bankruptcy court information, and how to find qualified bankruptcy attorneys throughout Illinois.

Illinois Median Income for Bankruptcy (2026)

To qualify for Chapter 7 bankruptcy in Illinois, your household income must be below these median income levels. If your income exceeds these amounts, you may still qualify through the means test or need to file Chapter 13 instead.

Household Size	Annual Median Income	Monthly Median Income
1 person	$62,961	$5,247
2 people	$80,437	$6,703
3 people	$95,170	$7,931
4 people	$109,137	$9,095
5 people	$118,137	$9,845
6 people	$127,137	$10,595

Note: For households larger than 4, add $9,000 per additional person. These figures are updated annually by the U.S. Trustee Program.

Calculate Your Illinois Eligibility

Illinois Bankruptcy Exemptions

Illinois allows filers to choose between Illinois state exemptions or federal bankruptcy exemptions. Many Illinois filers choose federal exemptions because they often provide better protection for most assets, particularly the wildcard exemption that can be used flexibly.

Illinois Homestead Exemption

Up to $15,000 (Illinois state exemptions) or $27,900 (federal exemptions).

Under Illinois state exemptions, you can protect up to $15,000 of equity in your home or other property covered by the homestead exemption. This is one of the lower state homestead exemptions in the country.

Under federal exemptions, you can protect up to $27,900 in homestead equity ($55,800 for married couples filing jointly). Additionally, any unused portion of the federal homestead exemption can be added to the wildcard exemption to protect other property.

Illinois Vehicle Exemption

Up to $2,400 (IL state) or $4,450 (federal exemptions).

Under Illinois state exemptions, you can protect up to $2,400 of equity in one motor vehicle. Under federal exemptions, you can protect $4,450 in vehicle equity per person, and married couples can each claim this exemption for separate vehicles.

Illinois Exemption System Choice

Illinois allows you to choose between two exemption systems:

Illinois State Exemptions Include:

• Homestead: $15,000
• Vehicle: $2,400
• Personal Property: $4,000 for clothing, books, family pictures, and health aids
• Jewelry and Art: $2,000
• Tools of Trade: $1,500
• Wildcard: $4,000 for any property
• Wages: 85% of earned but unpaid wages (or 45 times the federal minimum wage per week, whichever is greater)

Federal Exemptions Include:

• Homestead: $27,900 ($55,800 for married couples)
• Vehicle: $4,450 per person
• Household Goods: $700 per item, up to $14,875 total
• Jewelry: $1,875
• Tools of Trade: $2,800
• Wildcard: $1,475 plus up to $13,950 of unused homestead exemption (total up to $15,425)

Other Protected Assets (Both Systems)

• Retirement Accounts: Fully protected including 401(k), IRA, pension plans, and government retirement benefits
• Public Benefits: Social Security, unemployment, workers' compensation, veteran's benefits, disability benefits
• Life Insurance: Proceeds if beneficiary is spouse, child, or dependent; cash value protected
• College Savings: 529 plans and Coverdell education savings accounts (federal)
• Personal Injury Awards: Protected under both systems with certain limitations

Filing Bankruptcy in Illinois

Chapter 7 Bankruptcy in Illinois

Chapter 7 bankruptcy is the most common type filed in Illinois. The process typically takes 3-4 months from filing to discharge and eliminates most unsecured debts including credit cards, medical bills, personal loans, and past-due utility bills.

To qualify for Chapter 7 in Illinois, you must pass the means test by having income below the Illinois median or by showing that after allowable expense deductions, you lack sufficient disposable income to fund a Chapter 13 repayment plan. You must also complete credit counseling from an approved agency within 180 days before filing.

Many Illinois filers benefit from choosing federal exemptions, which often provide better overall asset protection than state exemptions, particularly the flexible wildcard exemption.

Learn more about Chapter 7 bankruptcy →

Chapter 13 Bankruptcy in Illinois

Chapter 13 bankruptcy allows Illinois residents to keep property while repaying some or all debts through a court-approved 3-5 year payment plan. This option is particularly beneficial if you're behind on mortgage or car payments and want to catch up while stopping foreclosure or repossession.

Chapter 13 is also useful if your income is too high to qualify for Chapter 7, if you have non-exempt assets you want to protect, or if you have priority debts like recent taxes. In the Chicago area's expensive housing market, Chapter 13 can be especially valuable for saving homes from foreclosure.

Learn more about Chapter 13 bankruptcy →

Bankruptcy Courts in Illinois

Illinois is divided into three federal bankruptcy court districts:

Central District of Illinois

Main Courthouses: Peoria, Springfield, Danville, Urbana

Covers central Illinois including Peoria, Springfield, Bloomington, Champaign-Urbana, Decatur, and surrounding areas. This district handles bankruptcy cases for much of downstate Illinois.

Court divisions: Peoria, Springfield, Danville, and Urbana.

Northern District of Illinois

Main Courthouse: Chicago (also Rockford)

Covers northern Illinois including the entire Chicago metropolitan area, Rockford, and surrounding counties. This is the busiest bankruptcy district in Illinois, handling the majority of the state's bankruptcy filings.

Court divisions: Chicago (Eastern Division) and Rockford (Western Division).

Southern District of Illinois

Main Courthouses: East St. Louis, Benton

Covers southern Illinois including the Metro East area (East St. Louis, Belleville, Edwardsville), Marion, Carbondale, and the southernmost counties of Illinois.

Court divisions: East St. Louis and Benton.

You must file in the district where you have lived for the greater part of the 180 days before filing. Visit the U.S. Courts website for specific court locations, filing procedures, and local rules.

Illinois Residency Requirements

To use Illinois bankruptcy exemptions (either state or federal, as both are available), you must have been domiciled (legally residing) in Illinois for at least 730 days (2 years) before filing. If you've lived in Illinois for less than 2 years, you must use the exemptions from the state where you lived for the 180 days immediately before the 2-year period.

Once you meet the residency requirement, you can choose between Illinois state exemptions or federal exemptions based on which system better protects your specific assets.

Find an Illinois Bankruptcy Attorney

Most Illinois bankruptcy attorneys offer free initial consultations. Given the choice between state and federal exemptions and the complexity of bankruptcy law, consulting with an experienced Illinois bankruptcy attorney is highly recommended.

What an Illinois Bankruptcy Attorney Can Do

• Determine which bankruptcy chapter is right for your financial situation
• Analyze whether Illinois state or federal exemptions provide better protection
• Maximize asset protection under the exemption system you choose
• Navigate Illinois-specific bankruptcy procedures and local court rules
• Complete and file all required bankruptcy paperwork correctly
• Represent you at the 341 meeting of creditors
• Handle any objections from creditors or the bankruptcy trustee
• Guide you through the entire process from filing to discharge

Cost of Filing Bankruptcy in Illinois

Chapter 7 bankruptcy attorney fees in Illinois vary by location:

• Chicago and suburbs: $1,200 to $2,500 plus $338 filing fee
• Other Northern Illinois areas: $1,000 to $1,800 plus $338 filing fee
• Central and Southern Illinois: $900 to $1,500 plus $338 filing fee

Chapter 13 attorney fees typically range from $3,000 to $4,500 plus a $313 filing fee. In Chapter 13, attorney fees are usually paid through your repayment plan rather than upfront, making bankruptcy more accessible.

Many Illinois attorneys offer payment plans for Chapter 7 to help make bankruptcy affordable.

Illinois-Specific Bankruptcy FAQs

Should I use Illinois state or federal exemptions?

Most Illinois filers choose federal exemptions because they provide better overall protection. Federal exemptions offer a higher homestead exemption ($27,900 vs. $15,000), higher vehicle exemption ($4,450 vs. $2,400), and a more flexible wildcard exemption. However, if you have specific assets that Illinois state exemptions protect better, state exemptions may be preferable. An attorney can help you analyze your situation.

Can I keep my house in Illinois bankruptcy?

It depends on your equity. Under Illinois state exemptions, you can protect up to $15,000 of equity. Under federal exemptions, you can protect up to $27,900 ($55,800 for married couples). If your equity exceeds these amounts and you can't protect it with other exemptions, you may need to file Chapter 13 to keep your home.

Can I keep my car in Illinois bankruptcy?

Yes, in most cases. Illinois state exemptions protect up to $2,400 in vehicle equity, while federal exemptions protect up to $4,450 per person. If you owe more than your car is worth or have minimal equity, you can typically keep it by continuing to make payments through a reaffirmation agreement in Chapter 7.

How does bankruptcy affect wage garnishment in Illinois?

Filing bankruptcy immediately stops wage garnishment through the automatic stay. Illinois law already protects 85% of your wages from garnishment (or 45 times the federal minimum wage per week, whichever is greater), and bankruptcy provides complete relief from most garnishments.

What debts cannot be discharged in Illinois bankruptcy?

Like all states, Illinois bankruptcy cannot discharge child support, alimony, most student loans, recent taxes, debts incurred through fraud, and court-ordered restitution. Most credit cards, medical bills, and personal loans can be discharged in Chapter 7.

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