Getting a fresh start through bankruptcy in Illinois

Many people in Illinois have filed bankruptcy since the beginning of the recession. It doesn't matter whether it's a Chapter 7 or a Chapter 13, in the end, there is a fresh start. Bankruptcy provides those who file with a chance to begin their financial life over again.

People file bankruptcy for a variety of reasons, but at the heart of it, one reason is the same for everyone -- the debts have piled up and there is no end in sight. The recession left a lot of people in this situation. There are some filers who lost their job and had a hard time finding another one, if they ever did find another one. Some people were part of the mortgage crisis and got behind on their mortgage.

Others suffered some sort of medical calamity such as a severe accident or chronic illness. No matter what the underlying cause is, life has been stressful because of financial problems. There aren't as many filers who have simply made bad financial decisions as some people may think.

Individuals in Illinois may file either a Chapter 7, which is a total liquidation, or a Chapter 13, which is a reorganization of debts. Often, the deciding factor is income. Every state has a median income schedule. If someone is above a certain income, they may file a Chapter 13, anyone below that income may file a Chapter 7.

In the end, most debts will be discharged. There are some notable exceptions such as some taxes, child support and student loans. Even so, the filer will get a financial fresh start that will hopefully mean less stress and a new lease on life.

Source: The Dickinson Press, "Bankruptcy: A clean slate, but at what cost?" Sherri Richards, July 25, 2013

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