Bankruptcy Filings Are Down, but Chicagoans Seeking Help in Record Numbers
The New York Times reported recently that the number of people who have filed for bankruptcy protection in Chicago and throughout the country is down, but it doesn't necessarily mean the economy is on its way to improving.
In fact, experts believe that bankruptcy numbers simply indicate that lenders are being more generous with extending lines of credit to people in need -- or are slower to foreclose or take other action. Generous they are not. These companies prey on consumers who are desperate to pay their bills and it usually sends them spiraling deeper into debt.
If you are looking for a fresh start, a clean slate and a refreshing end to creditor calls, filing for bankruptcy in Illinois may be a strategy to explore. Chicago Bankruptcy Lawyers have helped countless numbers of Chicago homeowners and consumers who have fallen behind on house and credit card payments. Using the laws that the government has established long ago to help consumers recover and move forward, these people have been able to put debt behind them.
According to the news article, there were 120,623 bankruptcy filings in June, which were down from 122,775 in May. That's about a 6 percent drop from month to month. But for the year, there will likely still be more than 1.5 million bankruptcy filings by consumers nationwide.
Experts believe that a drop in numbers doesn't mean the economy is healthy or that consumers are better off than they were in 2010. Rather, access to credit has improved and people can rely on credit cards and other loans to get them through a rough period.
"There is a lot of mythology about what drives bankruptcy rates," said Robert M. Lawless, a professor at the University of Illinois College of Law who specializes in bankruptcy. "But consumer credit appears to be the most significant indicator."
Lawless predicts there to be about 1.46 million bankruptcy filings this year. That compares with about 1.56 million in 2010 and 1.45 in 2009. Filings surpassed 2 million in 2005, when many people rushed to file before a new law went into effect that made it more difficult, and more expensive, to file for bankruptcy. But the numbers still remain very high.
This year, 70 percent of consumer filings were Chapter 7, which allows people a fresh start by eliminating debt.
About 27 percent of filings were Chapter 13, which allows people to keep large assets, such as cars and a home, and set up a payment plan over three to five years to make payments.
Chicago Bankruptcy Lawyers are prepared to handle either type of case or explore other debt solutions for our clients. But consumers must take the first step and set up an appointment. A free consultation is needed in order to assess the consumer's financial well-being, outstanding debts, earning potential and overall situation.
If you need to speak to a Chicago bankruptcy attorney call the DebtStoppers Bankruptcy Law Firm at 800-440-7235 today for a free debt analysis. Call 800-440-7235.
Fewer Americans File for Bankruptcy, by Tara Siegel Bernard, The New York Times
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