Friday, April 20, 2012

Bankruptcies Down, Foreclosures Up in Chicagoland

For struggling Chicagoland families, bankruptcy and foreclosure often go hand-in-hand.  It is not uncommon for families facing serious financial difficulty to fear they will lose their homes and to consider filing for bankruptcy.  As our Oak Park foreclosure lawyers know, there are many legal options available for struggling Illinois residents, as well as several new federal and state programs that specifically provide assistance for homeowners.  Our attorneys frequently follow the trends of foreclosure and bankruptcy across the nation and in the Chicago area to ensure we have as much up-to-date information as possible about the factors currently affecting the economy.

For example, local bankruptcies are on the decline, in contrast with the current national trend, according the Medill Reports.  According to data reported by the U.S. Bankruptcy Court in the Northern District of Illinois, the number of bankruptcy filings has dropped in January, February, and March of this year in comparison to those same months in 2011.  Those of us working in Chicago bankruptcy law know that lower filing numbers have been occurring for a few years now.  In 2011, bankruptcy filings dropped about 10% from 2010, the first annual decline since 2006.  On the other hand, bankruptcy filings across the nation rose last year from approximately 1.53 million in 2010 to 1.57 million in 2011, an increase of 2.6%.  Numbers for the first quarter of 2012 are not yet available.

Experts are divided over the reasons driving this trend.  Some experts attributed the local decline to a slightly improved economy, as well as low mortgage interest rates and tougher controls over borrowing.  However, others have questioned whether the decline is indicative of an overall trend.  Numbers may be low at the beginning of the year because consumers choose to wait until closer to the filing deadline to declare bankruptcy.  Many Oak Park and River Forest bankruptcy lawyers are still speaking with distressed consumers concerned about a variety of debt, including credit card debt, medical bills, and student loans.

In contrast, foreclosure filings recently have increased in the Chicago area.  In March, such filings jumped 18.5% from a year earlier and 1.8% from this February, according to an article in the Chicago Sun-Times.  Illinois is doing significantly worse than the nation as a whole in this area.  Nationally, the numbers dropped 17.1% from March 2011 and fell 3.9% from this February.  In 2012’s first quarter, our state had the nation’s third highest foreclosure total with 11,342 homes receiving filings.  Although the national foreclosure trends have been more positive so far this year than those in our home state, these trends are not expected to continue.  Increases in foreclosure filings are expected to increase as less and less mortgage paperwork will be tied up in courts inspecting the accuracy and authenticity of those documents in the wake of the robo-signing scandal.

The Vice-President of the Woodstock Institute, a Chicago-based policy and advocacy nonprofit, stated that “concerted effort” was necessary “to address the forces that drive foreclosure activity, such as negative equity and unemployment.”  Our Cook County foreclosure defense lawyers agree that many homeowners are still in jeopardy and feel hopeless in the face of foreclosure.  Much must still be done to help our faltering economy recovery, but in the meantime, if you are at risk of losing your home to foreclosure, please consider contacting a legal professional to discuss the number of options available to you.

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