Chapter 7 Bankruptcy in Illinois
The most direct path out of unmanageable debt. Chapter 7 erases qualifying unsecured debt — credit cards, medical bills, personal loans — so you can rebuild, often in just three to four months. Here's how it works, in plain English, from a local attorney — not a call center.
Debts Chapter 7 can erase
Chapter 7 is sometimes called “liquidation” bankruptcy, but for most people that word is misleading — the vast majority of filers lose none of their property. What it really does is wipe out most unsecured debt, permanently. You don't pay it back. That's the fresh start the law was built to give you.
- Credit card and store-card balances
- Medical and hospital bills
- Personal and payday loans
- Collection accounts and judgments
- Old utility and phone bills
- Debt left after a repossession or foreclosure
What usually survives
Student loans (in most cases), child support and alimony, most recent taxes, and court fines generally can't be erased. We'll tell you clearly where you stand in your free consultation.
Do you qualify?
Chapter 7 eligibility depends on a “means test” comparing your income to the Illinois median. Most of our clients qualify.
One income check decides most cases.
The means test sounds intimidating, but it's really just a comparison: your household income against the Illinois median for your family size. Below the line, you generally qualify automatically. Above it, the test deducts your real living expenses — many people still pass.
And if Chapter 7 isn't the fit, that's not a dead end. Chapter 13 reorganizes your debt into one court-protected monthly payment instead, and it's often the better tool for protecting a home. We run the numbers for you, free, before anything is filed.
Illinois median income for bankruptcy cases filed on or after April 1, 2026. Add $11,100 for each household member beyond four.
Illinois exemptions protect what matters.
This is the part people fear most — and the part most people are wrong about. In a typical Chapter 7 case you keep your house, your car, your retirement accounts, and your everyday belongings. Illinois law spells out how much equity is protected, and the 2026 numbers are the most generous they've ever been.
The biggest change is the homestead exemption, which more than tripled for cases filed on or after January 1, 2026. For many Illinois homeowners, that single change is the difference between fearing for the house and keeping it. Retirement accounts — 401(k)s, IRAs, pensions — are almost always fully protected on top of these amounts.
Illinois exemption amounts for cases filed on or after January 1, 2026.
What to expect, step by step
Free consultation
We listen to your situation, run the means test for your household, and tell you honestly whether Chapter 7 fits. No pressure, no judgment.
We build & file your case
We prepare every document and file with the bankruptcy court for your district. The $338 court filing fee can often be paid in installments — or waived for low incomes.
The automatic stay
The moment your case is filed, a federal court order stops most collection calls, wage garnishments, and lawsuits — immediately.
341 meeting & discharge
One short, routine meeting with the trustee — now held virtually over Zoom, so there's no trip downtown. About three to four months after filing, qualifying debt is erased for good.
Chapter 7, answered honestly
Most people who file do. Eligibility comes down to the means test: if your household income is below the Illinois median for your family size, you generally qualify automatically. If you're above it, you may still qualify once the test accounts for your actual living expenses. We run the means test for you at your free consultation, so you don't have to figure it out alone.
For cases filed on or after April 1, 2026, the Illinois median income is $73,180 for a one-person household, $93,934 for two people, $113,625 for three, and $137,902 for four, plus $11,100 for each additional person. Below the line for your household size, you generally qualify automatically. Above it, the full means test deducts your real expenses — many people still pass.
Most of our clients keep everything they own. For cases filed in 2026, Illinois protects up to $50,000 of home equity for an individual ($100,000 for a married couple filing together), $3,600 of vehicle equity plus a $4,000 wildcard you can stack on top, and retirement accounts are almost always fully protected. We map out exactly what's protected in your case before anything is filed — no surprises.
Chapter 7 discharges most unsecured debt: credit cards, medical bills, personal and payday loans, old utility bills, and balances left over after a repossession or foreclosure. It generally cannot erase student loans, child support, alimony, recent taxes, or court fines. If most of what's crushing you is credit cards and medical bills, Chapter 7 is built for exactly your situation.
Most Chapter 7 cases are discharged about three to four months after filing. The only court event most filers attend is the 341 meeting of creditors — a short, routine meeting that's now held virtually over Zoom, so you won't have to take a day off to drive downtown. We're right there with you.
The court filing fee for Chapter 7 is $338 — set by the federal court, the same no matter who represents you. If your income is low enough, the court can let you pay it in installments or waive it entirely. Your consultation with us is always free, and we'll walk through every cost in plain numbers before you commit to anything.
A Chapter 7 filing can appear on your credit report for up to ten years — but if you're already behind, your credit is taking new damage every month from late payments, maxed-out balances, and collections. Discharge stops that slide and gives you a clean base to rebuild from, and many people start seeing real improvement well before the filing falls off.
Bankruptcy is a legal court process, but in practice it's quiet and private. We handle it discreetly, and your friends, neighbors, and most employers will have no reason to know.
Not sure if Chapter 7 is right for you?
That's exactly what a free consultation is for. We'll listen, explain your options — including Chapter 13 and alternatives — and help you decide with no pressure.