Filing for bankruptcy in Chicago or anywhere else means a person is required to fully disclose their entire financial picture, and this includes all assets and liabilities. Not doing so is considered a breach and can result in your bankruptcy case being dismissed. In the case of a Chapter 13 filing, anything that occurs financially while a person is in their payment plan period must be disclosed to the trustee in the event adjustments have to be made.
If a person engages in any other legal activity that might result in a financial gain for the person while they are in bankruptcy proceedings, that person is required to inform the trustee. First, because most litigation requires an attorney and legal fees, and second, any money spent above and beyond the agreed upon expenditures have to be approved by the trustee.
Recently, a woman who had been in the midst of paying her Chapter 13 payment plan was in a car accident. She filed a suit against the person who hit her, but failed to let the trustee know. When the defendant in the suit found out about the woman's failure to disclose, the defendant moved to dismiss the suit on the grounds that she was under bankruptcy protection, and therefore, had no right to sue. The judge agreed that the woman didn't have the right, but that the bankruptcy trustee did on behalf of the creditors.
The defendant appealed but lost. The appellate court also ruled that although the woman could not sue for damages, the trustee could because the accident damaged an asset of the bankruptcy.
Whether to woman was trying to score a payout without the trustee finding out or was simply ignorant to the law, her actions put her bankruptcy case in jeopardy. Anyone who is going through a bankruptcy or even just considering it, should speak to a legal professional experienced in that particular area of the law. The more knowledge a person has, the easier it is to make an informed decision.
Source: Bloomberg Law, "Chapter 13 debtor has continuing duty to disclosure post-petition causes of action" Diane Davis, Oct. 18, 2013