When Tough Economy Takes Toll on Psychological Health, Chicago Bankruptcy May Help

Prolonged periods of financial struggle are taking a toll on the psychological health of many Chicago families - kids included.

A recent Chicago Sun-Times article examines the effects of long-term unemployment and foreclosure on children. Currently, unemployment rate in Chicago is hovering above 9% and more than 138,000 homes in the Chicago metro area have gone into foreclosure since the recession began - that's one in every 27 houses.

While all age groups can suffer from financial distress, studies are showing that uncertainty and stress can affect the behavior of kids in school and, later in their lives, in the workplace. Children may become withdrawn, act out in class or at home, or experience depression. Kids with a father who lost a job were more likely be suspended or expelled from school, while children with low-income mothers out of work were 40% more likely to exhibit problem behavior.

As parents, we can't control the economy for our kids - but we do have some control over how we react to economic changes. Maintaining consistency is key, say experts. A Chicago bankruptcy filing may be able to help.

If you've lost a major source of income or are drowning in debt, Chapter 13 bankruptcy can protect your home from foreclosure and help you get back on track with payments. Shielding your kids from the upheaval of losing a home, finding another place to live, and moving to a new location can go a long way toward making this tough time more manageable. Meanwhile, with the burden of the mortgage out of the way, it will be easier to focus on managing the credit card debt that often makes house payments so difficult.

If you've been out of work for an extended period of time, Chapter 7 bankruptcy may be able to eliminate your debts in entirety - in many cases, while also allowing you to keep assets like your home - so that you can devote more time to finding work and less time battling bill collectors.

In a recent blog post, our Chicago bankruptcy attorneys looked at how bankruptcy can allow enough financial breathing room for the unemployed to take on part-time jobs, which are more readily available, as a stepping stone to full-time employment. Look at it as a fresh start for you and your family.

Meanwhile, an article by the Family Education Network offers up some tips on how to discuss job loss with children.

Be Honest - To an Extent
Often times, uncertainty is even scarier than reality. Be upfront about your job loss. You don't have to give your kids the specific details of your finances, but be open about what changes they can expect. That said, don't speculate out loud about unknowns like foreclosure, which could just leave them more worried. Make sure your kids know that whatever happens, you'll get through it together.

Money Lessons
If your child wants to go to the mall or get the latest electronic gadget, this can be a good opportunity to talk about restraint. You may want to mention that things have changed, and you won't be able to afford everything that was possible before. It's important to stick together, and that means saving money together.

Stick to a Routine
Whether it's sitting down to dinner at the same time every day or enjoying a favorite family activity on the weekend, find ways to spend quality time with your kids. Unemployment is not an ideal situation, but maintaining a routine and making sure your children feel loved will help them hold onto some security when many things around them are changing.

Take Care of Yourself
Alcohol abuse, depression, and domestic violence can be an unfortunate side effect of unemployment and other financial struggles. It's often these issues, not the lack of money, that impact kids most. Take care of yourself so that you can take care of your kids. If you need help, ask. Many counties offer no-cost or low-cost family counseling services.

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.

More Blog Entries:

Jobs Up, Unemployment Down, But Chicago Bankruptcy Still a Viable Option: December 14, 2011

Bankruptcy in Chicago Can Help in Tough Economic Times: December 11, 2011

Additional Resources:

Tough Economy Isn't Child's Play, by Francine Knowles, Chicago Sun-Times

When Parents Lose a Job: Talking to Kids about Layoffs, by Katy Abel, Family Education

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