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If you declare bankruptcy, will you lose literally every dollar that you have in your savings? The answer is no: some cash can be exempted in a Chapter 7 case. For example, typically under Federal exemptions, you can have approximately $20,000.00 cash on hand or in the bank on the day you file bankruptcy.

The court could see your case as fraud if you look like you are overspending before filing. It's fine to stock up on grocery items or household goods like toilet paper or cleaning supplies before your file. In some cases, it may even make sense for you to purchase a car if the court will seize your current vehicle.

Illinois law also gives each individual the right to exempt up to $4,000 in equity for any other personal property, including cash or money in the bank. If a husband and wife file jointly for bankruptcy, each spouse is entitled to claim these exemptions as well.

If you don't have the money to pay the fees, file the Application for Individuals to Pay the Filing Fee in Installments or the Application to Have the Chapter 7 Filing Fee Waived that you filled out in Step 4. The court will review your application and decide whether you have to pay the court fees.

While no specific cash exemption is listed in the federal bankruptcy exemptions, a wildcard exemption allows you to protect up to $1,325 in any property and use up to $12,575 of any unused portion of a homestead exemption to protect money.

If your total monthly income over the course of the next 60 months is less than $7,475 then you pass the means test and you may file a Chapter 7 bankruptcy. If it is over $12,475 then you fail the means test and don't have the option of filing Chapter 7.