The goal of the negotiation is to have the bank forgive the debt and allow you to walk away free and clear of the mortgage. However, depending on your financial situation the bank may ask that you contribute to the loss, for example, by signing a promissory note. These are often for a small amount, and extend over a long period of time at little or no interest. You have the option of refusing to sign the note and let the bank foreclose. I am not sure whether Illinois is a 'recourse' state or not, if not then they cannot come after you for the balance. If so, the bank can try to get what is called a 'deficiency judgment'. Even if they do get one, however, all is not lost. You can also consider filing for bankruptcy and try to discharge the deficiency judgment in bankruptcy court.
What you need to do is talk to a lawyer who is familiar with short sales, foreclosure law in Illinois, and bankruptcy law. There are options, not always good options, but options and they should all be explored to learn which is the best option for you.