In tough economic times it is not uncommon for more and more individuals and families to find difficulty meeting expenses. Whether it is the loss of a job or growing payments on credit card or mortgage debt, the real possibility of not being able to meet financial obligations is disheartening. Most people have not contemplated what their course of action would be if they could no longer make the minimum payments on their debts. Unfortunately, as that very situation becomes more common some believe that filing for bankruptcy comes with an unjustifiable stigma by those it could help most.
A recent story in the Chicago Tribune reported that U.S. consumer bankruptcy filings fell 18 percent between July 2010 and July 2011. While these figures from the National Bankruptcy Research Center may sound like the positive signs of a rebounding economy, our Oak Park bankruptcy lawyers know that there remains a strong demand for legal help in these matters. Somewhat discouragingly the Labor Department recently announced that unemployment rates remain near 9.2%. When the unemployment figure takes into account individuals who are merely working part-time jobs for economic reasons, it rises to 16.2 percent, making it likely that Illinois bankruptcy filings will not be sharply declining anytime soon.
In what is perhaps a reflection of a nation tightening its belt, the Commerce Department cited a 0.2 percent decline in consumer spending in June. Even if that trend were to continue it does not mean bankruptcy numbers will immediately relent. American Bankruptcy Institute Executive Director Samuel Gerdano has stated that “there is typically a 12-18 month lag between declines in consumer spending and bankruptcy levels.”
With nearly a sixth of the country unemployed or underemployed and no let up in bankruptcy rates expected in the near future it is likely that more individuals will be considering this process as a way to obtain relief from overwhelming debts. To the uninitiated bankruptcy may seem like a willful destruction of your finances, requiring the filer to liquidate all of their assets and possessions. That is simply not the case.
While Illinois bankruptcy filings cannot eliminate debt from things like child support, alimony, certain types of student loans or recent back taxes, it does eliminate most other kinds of debt and can allow the filer a much desired opportunity to get their finances back on track. Additionally, bankruptcy does not require the person filing to impoverish themselves and forfeit benefits they may have spent decades earning. Payments from pensions, social security, retirement plans and workers’ compensation are often protected as may be exemptions towards a residence, cars and personal property.
Our Oak Park bankruptcy lawyers know that in some circumstances filing bankruptcy can help to clear up one’s finances before a situation is exacerbated further. Even the most indebted person can regain a modicum of control over their financial future through the benefits of filing bankruptcy. Anyone facing serious financial hardship would be well advised to consult a bankruptcy professional to learn if filing might be in their best interest.
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