• A debtor needs to know the advantages and disadvantages of filing for bankruptcy.Flat Broke Calculator image by ike from Fotolia.com
  
  If an Illinois debtor is in danger of losing his possessions and living paycheck to paycheck but still can not cover all of his bills, he may consider filing for Chapter 7 bankruptcy. Bankruptcy is normally considered a last resort for debtors. Any debtor who cannot decide whether to file for bankruptcy should ask questions to find out the advantages and disadvantages of filing.
  
  

Can I file for Chapter 7?

• An Illinois debtor should first figure out whether he can file for Chapter 7 bankruptcy. A debtor must compare his family income the median family income for a family of the same size within the state of Illinois. If the debtor's family income is below the state median, he can file for Chapter 7 bankruptcy. If the debtor's family income is above the median, he must then calculate his monthly disposable income. If the debtor's monthly disposable income is less than $100, the debtor can file for Chapter 7 bankruptcy. If the debtor's monthly disposable income is more than $100, and that amount would not be enough to pay at least 25 percent of his debts over the next 60 months, he can still file for Chapter 7 bankruptcy. Any other result disqualifies him from filing Chapter 7.
  
  

Will I lose my property?

• In a Chapter 7 bankruptcy case, a bankruptcy trustee sells the debtor's property and uses the proceeds to pay a portion of the debtor's creditors. However, the state of Illinois lists certain property that can not be sold. Any property the debtor owns in excess of the property on the list will be sold to pay his creditors. If the debtor does not have any property in excess of the property listed, the trustee has nothing to sell, and the debtor keeps all of his property. In such an instance, the debtor has a no-asset case, and this development will not affect the debtor's ability to discharge his debts.
  
  

What debts will be discharged?

• Chapter 7 bankruptcy cases in Illinois end with the discharge of unsecured debts. Unsecured debts are those debts that are not backed by collateral. Examples of unsecured debts are credit card balances, cash advances, medical bills, attorney fees, rent payments, utility payments and student loans. Certain unsecured debts can not be discharged, such as student loans, alimony, child support, taxes owed and compensation owed to employees. Unsecured debts such as credit card debt and medical bills, to name a couple, can be discharged.