Thursday, October 27, 2011

Drop in Illinois Bankruptcy Filings May Not Signal Economic Recovery

Our Oak Park bankruptcy lawyers know that deciding to file for bankruptcy is a difficult decision for anyone.  It can be a complicated and seemingly overwhelming process, but your situation may not be as hopeless as it appears.  We recently explained that many debtors fail to seek professional assistance when facing bankruptcy.  Yet getting help from professionals versed in Illinois bankruptcy law can ease the minds of struggling Chicagoland residents as they face rising personal debt, high unemployment rates, and a large-scale economic decline.  

Some states, including Illinois, recently reported lower rates of bankruptcy filings, but economists warn that such numbers may not be a sign of an economic recovery.  In fact, it could be just the opposite.  

According to an article in Authority Empire, lower rates of bankruptcy probably are not a sign of a prospering economy.  Rather, it may merely mean that people do not have enough assets that need protection.  If they did, then bankruptcy might still be a viable option to safeguard those assets.  It could also indicate that many people are relying on credit to get through these tough economic times or that they simply do not have the money to pay the attorney fees and court costs associated with filing for bankruptcy. 

Earlier this month, The State Journal-Register also reported that bankruptcy filings dropped 14 percent in central Illinois.  The article cited consumer reluctance to take on debt in an uncertain economy and tighter credit standards as two reasons for the decline. 

Bankruptcies often increase when credit is harder to get and people do not have as many options.
Unfortunately, economic analysts noted that the events that most everyday, hardworking people face—divorce, medical bills, and unemployment—are still the top reasons for filing for bankruptcy, despite the overall downturn in such filings.

Although bankruptcy generally should be a last resort if possible, it can prevent home foreclosure, wage garnishment, harassment from collection agencies and creditors, and repossession.  Many of our clients are relieved once they seek out our help because negotiating with creditors can be an arduous task.  Some creditors are not as willing to work with debtors as you might think, even if it could ultimately be to the creditors’ benefit. 

The Chicago bankruptcy attorneys at the Emerson Law Firm frequently handle Chapter 7 bankruptcy proceedings.  Chapter 7 bankruptcy allows you to consolidate student loans, protect loan co-signers, or eliminate credit card debt.  You may want to consider filing for bankruptcy if you have faced a serious financial setback, such as divorce, an injury or illness resulting in high medical bills, or job loss or a reduction in pay. 

Remember, bankruptcy may not eliminate all debts you owe.  Debts such as child support, student loans, spousal maintenance, or recent cash advances typically cannot be discharged.  However, filing for bankruptcy is intended to repair your credit, which can help you regain control of your life and your finances.  Under Illinois bankruptcy law, some of your property will also be eligible for protection.  Such property is considered “exempt” under the law.  It includes, but is not limited to, child support and maintenance, clothing, pensions, and workers’ compensation. 

For a confidential bankruptcy with a legal professional at the Emerson Law Firm, please call our office at 708-660-9190 or visit us online to fill out our contact form. 

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