08/21/2025
Great news for all my Illinois Bankruptcy friends!
I know that we all want even BETTER exemptions but this is better than nothing. We also recently had our CARA fees (flat fees in Chapter 13 cases) increased to $5,500.00 in our 13s which is a much needed increase from $4,500.00. Yes it should have been higher, but it is all a work in progress.
Anyway I have a stack of files sitting on my desk that I hope to file in Jan. 2026 to take advantage of our increased exemptions. Read below to see our increases which most importantly increase our homestead exemption from $15,000.00 to $50,000.00 for an individual and up to $100,000.00 when two or more people own the home. This is big!
Illinois Enacts Public Act 1738: Modest but Meaningful Increases to Consumer Bankruptcy Exemptions
Springfield, IL – On August 1, 2025, Illinois officially enacted Public Act 1738, legislation that updates the state’s personal property and homestead exemptions, offering modest but meaningful relief for consumer bankruptcy debtors across Illinois.
Public Act 1738 increases the homestead exemption from $15,000 to $50,000 for a single individual and to $100,000 when two or more individuals own the property. These changes aim to provide stronger protections for homeowners facing financial hardship. This legislation takes effect on January 1, 2026.
The new law also updates other key personal property exemptions, including:
Raising the motor vehicle exemption from $2,400 to $3,600;
Increasing the exemption for implements, professional books, or tools of the debtor’s trade from $1,500 to $2,250.
In addition, Public Act 1738 introduces an automatic exemption for judgment debtors in consumer debt cases. This provision grants an automatic $1,000 exemption in a debtor's equity interest held in checking, savings, or credit union accounts for judgments entered on or after January 1, 2020. This $1,000 is considered part of the debtor’s existing $4,000 personal property exemption. The law takes effect on January 1, 2026.
The National Association of Consumer Bankruptcy Attorneys (NACBA) spent nearly two years negotiating this bill and worked in close partnership with Legal Action Chicago to secure these protections.
“While these increases are modest, they represent a step in the right direction for Illinois families,” said Krista D’Amelio, NACBA Director of Government Affairs. “We know these changes will benefit many consumer bankruptcy debtors, and NACBA remains committed to advocating for stronger protections that help individuals achieve a true fresh start and retain the essential personal property they need to do so.”
Springfield, IL – On August 1, 2025, Illinois officially enacted Public Act 1738, legislation that updates the state’s personal property and homestead exemptions, offering modest but meaningful relief for consumer bankruptcy debtors across Illinois.
