A common misconception in Chapter 7 bankruptcy is that the debtor's property will be lost when they file their case. For the majority of cases, this is not true for a couple reasons. First, if a person has a lot of assets they probably won't be filing in the first place. Secondly, though, even if a person does have assets when they file a Chapter 7 bankruptcy there are exemptions that can shield those assets. If there is still unprotected equity after those exemptions are utilized, only then will a bankruptcy trustee look to liquidate that property and will often accept a cash payment in lieu of the property anyways.
Regarding exemptions, within bankruptcy law there are federal and state exemptions. The bankruptcy code provides that states can choose to use either federal or opt out and use state exemptions. States can even choose to allow debtors to elect between the two, which means the debtor could select whichever exemption best shields their property. It is important to remember that because these are complicated matters, it is always best to consult a Chicago bankruptcy attorney to ensure you have the best protection possible.