See, e.g., In re Austin, 2014 WL 3695370 (Bankr.C.D.Ill. July 24, 2014) ; In re Royal, 397 B.R. 88, 102 (Bankr.N.D.Ill.2008). Instead, the Chapter 7 Trustee objects on the grounds that 735 ILCS 5/12–1001(g)(1) does not provide an exemption for payments already received or proceeds thereof.
In re Chapman, 177 B.R. 161, 162 (Bankr. D. Conn. 1994) (disability benefits received pre-petition not eligible for exemption under 11 U.S.C. § 522(d)(10)(C)); In re Michael, 262 B.R. 296, 298 (Bankr. M.D. Penn. 2001) (pre-petition workers' compensation benefits not eligible for exemption). Because she received the EIC before she filed her petition, under the plain language of § 513.430.1(10), debtor did not have a "right to receive . . . a public benefit." SeeIn re Austin, No. 14-70299, 2014 WL 3695370, at *3 (Bankr. C.D. Ill. July 24, 2014) (Illinois state exemption for right to receive public assistance benefits does not apply to EIC received before petition filed). Prior to August 28, 2012, § 513.430.1(10)(a) permitted debtors to exempt a right to receive "A Social Security benefit, unemployment compensation or a local public assistance benefit."
That argument conflicts with many cases holding that, once received, tax refunds are not exempt from collection under Illinois law. In re Frueh, 518 B.R. 881 (Bankr. N.D.Ill. 2014); In re Austin, 2014 WL 3695370 (Bankr. C.D. Ill. 2014) (Gorman, J.); In re Russell, 2013 WL 4591985 (Bankr. C.D. Ill. 2013) (Perkins, J.). It also conflicts with this Court's June 5, 2023 ruling denying Ms. Hodel an exemption in her bankruptcy case.
This Court has joined other courts in holding that the exemptions provided by § 12–1001(g) are limited by the language in the statute providing that the exemption applies only to the “right to receive” the listed benefits. See In re Austin, 2014 WL 3695370, at *3 (Bankr.C.D.Ill. July 24, 2014) ; In re Bowen, 458 B.R. 918, 922 (Bankr.C.D.Ill.2011) ; see also In re Franklin, 506 B.R. 765, 768 (Bankr.C.D.Ill.2014) (Perkins, J.); In re McQuaid, 492 B.R. 514, 517 (Bankr.N.D.Ill.2013) (Cassling, J.).
See, e.g., In re Austin, No. 14-70299, 2014 WL 3695370, at *3 (Bankr. C.D. Ill. July 24, 2014) (money in bank account from public benefits not exempt under section 12-1001(g)); In re Russell, No. 13-80468, 2013 WL 4591985, at *2 (Bankr. C.D. Ill. Aug. 28, 2013) (right to receive funds does not protect funds already received); In re Frueh, 518 B.R. 881, 884 (Bankr. N.D. Ill. 2014) (section 12-1001(g) applies only to the rights to receive future payments and not funds received prepetition or to the proceeds thereof); In re McQuaid, 492 B.R. 514, 517-18 (Bankr. N.D. Ill. 2013) (trust funds traceable to a disability payment made prior to bankruptcy petition were not exempt). However, in this case the disability funds in question were deposited postcitation.
Fayette County Hospital, 169 Ill. App. 3d at 249-50; In re Marriage of Pope-Clifton, 355 Ill. App. 3d at 481. See also, In re Austin, 2014 WL 3695370, at *3 (Bankr. C.D. Ill. 2014); In re Bowen, 458 B.R. 918, 922 (Bankr. C.D. Ill. 2011); In re McQuaid, 492 B.R. 514, 516-17 (Bankr. N.D. Ill. 2013).¶ 23 The holding in Fayette County Hospital, is instructive.