Under IL state law if husband files for bankruptcy can creditor's pursue wife's separate and community property

The ultimate determination of liability by creditors does not touch on marriage or the concept of "community property" (which does not apply in Illinois) but rather on whose debt is being discharged. Answering that question can be tricky, but the upshot is that if your name is on a bill, notice, credit card, etc. then you are probably liable for payment ('jointly and severally' as they say). Given the answers to a few questions I could get to the bottom of your situation quickly.

Bottom Line: Your filing does not need to affect your spouse at all. It all depends on the details.

If you have any joint debts and only you file, not her, then the creditors can still go after her for the debts. If you have jointly owned assets, they all become part of the bankruptcy estate to the extent you have an interest in them. Also, DON'T transfer any property from yourself to your wife right before filing, that is the worst possible thing you can do, as the trustee could go after your wife to get the property back. Because you must list all property that you specifically own, whether it's jointly owned with her or not, that MIGHT effect her, though might not. If you want to keep business assets, there will have to be little to no value in them, or you'd have to reaffirm the debts attached (if any) to them because, if they're worth more than the tools of trade exemption ($1500) and the wildcard exemption ($4000) and there are no liens encumbering them, and the trustee deems it worthwhile to sell them, then the trustee will want to sell them. This is assuming you file a chapter 7. And keep in mind you'd probably want to use the wildcard exemption to apply to any bank accounts and household items that you have.

If you file a chapter 13, you will be able to keep all property whether exempt or not, but this will require paying what they're worth into a 3-5 year plan. So you'd have to figure out if you can afford to do that. I am assuming that you are a sole proprietor with the business rather than an incorporation or llc, which would effect what happens to your property in a business bankruptcy as the personal bankruptcy wouldn't effect assets owned by the entity and not you.

You really need t have an attorney review your personal situation with you about this. This can be very complex if your wife is not filing and you have anything (property or debt) together whatsoever and don't want her to be effected. Additionally dissolving a business also complicates things. There s no way to accurately answer this based on your question because there just isn't sufficient information. My answer is very general based on what COULD be the situation.