12-1006.Exemption for retirement plans.

Article XII. Judgments - Enforcement · Part 10. Exemption of Personal Property · Not amended since adoption on record · Last verified July 20, 2026

In one sentenceProtects a debtor's interest in tax-qualified retirement plans and Illinois public pensions from judgment, attachment, execution, distress, and seizure, treating them as spendthrift trusts.

Full Text of 735 ILCS 5/12-1006

Text size

(a) A debtor's interest in or right, whether vested or not, to the assets held in or to receive pensions, annuities, benefits, distributions, refunds of contributions, or other payments under a retirement plan is exempt from judgment, attachment, execution, distress for rent, and seizure for the satisfaction of debts if the plan (i) is intended in good faith to qualify as a retirement plan under applicable provisions of the Internal Revenue Code of 1986, as now or hereafter amended, or (ii) is a public employee pension plan created under the Illinois Pension Code, as now or hereafter amended. (b) "Retirement plan" includes the following:

(1) a stock bonus, pension, profit sharing, annuity, or similar plan or arrangement, including a retirement plan for self-employed individuals or a simplified employee pension plan;

(2) a government or church retirement plan or contract;

(3) an individual retirement annuity or individual retirement account; and

(4) a public employee pension plan created under the Illinois Pension Code, as now or hereafter amended. (c) A retirement plan that is (i) intended in good faith to qualify as a retirement plan under the applicable provisions of the Internal Revenue Code of 1986, as now or hereafter amended, or (ii) a public employee pension plan created under the Illinois Pension Code, as now or hereafter amended, is conclusively presumed to be a spendthrift trust under the law of Illinois. (d) This Section applies to interests in retirement plans held by debtors subject to bankruptcy, judicial, administrative or other proceedings pending on or filed after August 30, 1989.

End

Plain-English Summary

Retirement savings get their own exemption, separate from the wildcard and other caps in the personal-property list. A debtor's interest or right, vested or not, to the assets, benefits, distributions, or refunds under a retirement plan is exempt from judgment, attachment, execution, distress for rent, and seizure, as long as the plan either is intended in good faith to qualify under the Internal Revenue Code, or is a public employee pension plan created under the Illinois Pension Code.

“Retirement plan” covers a wide range: stock bonus, pension, profit-sharing, and annuity plans (including self-employed and simplified employee pension plans), government or church retirement plans and contracts, individual retirement accounts and annuities, and public employee pension plans under the Illinois Pension Code.

A qualifying plan is conclusively presumed to be a spendthrift trust under Illinois law, reinforcing the protection against creditors. The section applies to interests held by debtors in bankruptcy, judicial, administrative, or other proceedings pending on or filed after August 30, 1989.

Frequently Asked Questions

Are retirement accounts protected from creditors in Illinois?

Yes, if the plan is intended in good faith to qualify under the Internal Revenue Code, or is a public employee pension plan under the Illinois Pension Code.

What types of plans count as a “retirement plan” under this section?

Stock bonus, pension, profit-sharing, and annuity plans, self-employed and simplified employee pension plans, government or church retirement plans, IRAs, and Illinois public employee pension plans.

Does this section set a dollar cap on the retirement-plan exemption?

No. It doesn't state a dollar limit for a qualifying plan.

How does Illinois law treat a qualifying retirement plan for creditor purposes?

As conclusively presumed to be a spendthrift trust.

Does this exemption apply in bankruptcy?

Yes, to debtors in bankruptcy, judicial, administrative, or other proceedings pending on or filed after August 30, 1989.

Amendment History

(Source: P.A. 86-393; 86-1329.)

Source & verification. Section text and amendment history are reproduced verbatim from the Illinois Compiled Statutes, published by the Illinois Compiled Statutes, Illinois General Assembly / Legislative Reference Bureau. Last verified July 20, 2026. · Official source

Also known as: illinois retirement account exemptionare pensions protected from creditors in illinoisira exemption illinois bankruptcyspendthrift trust retirement plan illinois