Chapter 7 Bankruptcy
Explore a Path to Financial Relief Through Chapter 7What Is Chapter 7 Bankruptcy?
Chapter 7 Bankruptcy, commonly referred to as “liquidation bankruptcy”, is a legal process designed to help individuals eliminate most unsecured debts and achieve a financial reset. It’s one of the most commonly filed forms of bankruptcy in the United States.
Filing for Chapter 7 can:
- Stop creditor harassment and collection efforts
- Discharge (eliminate) most types of unsecured debts
- Provide a fresh financial start
However, certain debts like student loans, child support, and some taxesare typically non-dischargeable. Every bankruptcy case is unique. The benefits listed above may apply depending on your eligibility and specific circumstances.
How Chapter 7 Works
When you file for Chapter 7, the court appoints a bankruptcy trustee who oversees the process. While you may have to liquidate (sell) non-exempt assets, many filers keep their home, vehicle, and essential belongings under Illinois exemption laws.
The process generally involves:
- Filing a petition with the bankruptcy court
- Automatic stay begins, stopping collections and lawsuits
- A 341 meeting (creditors’ meeting) is scheduled
- Dischargeable debts are eliminated, typically within 3–6 months
Note: Eligibility for discharge and the timeline for completion depend on your specific financial situation and the type of debt involved.
Who Qualifies for Chapter 7 Bankruptcy?
To qualify, you must generally pass the means test, which compares your income to the Illinois median. Eligibility can be complex, and some individuals may find Chapter 13 to be a better fit for their circumstances.
You may qualify if:
- You have significant unsecured debt (credit cards, medical bills, personal loans)
- You are struggling with wage garnishment or lawsuits
- You have limited disposable income to repay creditors
Unsure if you qualify? Contact us to evaluate your eligibility.
Debts That Can Be Discharged
Chapter 7 can help eliminate unsecured debt, including:
- Credit card balances
- Medical bills
- Personal loans
- Utility bills
- Payday loans
It does not eliminate:
- Alimony or child support
- Certain tax obligations
- Student loans (except in rare cases)
- Debts due to fraud or criminal restitution
Chapter 13 vs. Chapter 7 Bankruptcy
Chapter 13
- Type: Debt reorganization
- Repayment required via a monthly plan
- Time to Completion: 3 to 5 years
- Asset Retention: More likely to keep property
- Income Requirement: Must have a regular income
Chapter 7
- Type: Debt elimination (liquidation)
- Repayment NOT required (except non-dischargeable debts)
- Time to Completion: 3 to 6 months
- Asset Retention: May require the sale of non-exempt assets
- Income Requirement: Must pass the means test
Not sure which chapter is right for you? Give us a call at (773) 944-4000, and we will guide you.

Why Choose Tang & Associates?
At Tang & Associates, we understand the emotional and financial stress that comes with overwhelming debt. We provide compassionate, personalized guidance and clear communication at every step of the process, along with strong advocacy both in and out of court.
Our team is committed to helping individuals and families throughout the greater Chicago metropolitan area, including Cook, DuPage, and Lake counties, pursue practical, strategic solutions aimed at restoring financial stability.
FAQs – Chapter 7 Bankruptcy
How long does Chapter 7 stay on my credit report?
Chapter 7 bankruptcy typically remains for up to 10 years. Some people find opportunities to start improving their credit during or after the process, depending on their unique financial situation.
Will I lose everything if I file?
Not likely. Illinois exemption laws protect many assets, including a primary residence, personal property, and retirement accounts.
How much does it cost to file Chapter 7?
Costs vary based on filing fees and attorney representation. We offer flexible payment options and transparent pricing.
Can creditors still contact me after I file?
No. Once you file, an automatic stay goes into effect, immediately halting creditor contact, lawsuits, and garnishments.
Start Fresh with Trusted Legal Guidance
If you are considering filing for Chapter 7 Bankruptcy in Chicago, don’t navigate the process alone. Let our team at Tang & Associates help you assess your options and take the first step on your path toward financial stability.
Call us at (773) 944-4000 or contact us online by completing the form below.