Chicago Bankruptcy Filings Have Risen in Recent Years
The 1990s and early 2000s were a period of breathtaking economic growth and real estate development throughout the Chicago area. Many previously derelict areas in the near West and North sides as well as stretches along the South Loop were transformed from abandoned warehouses and low-rent housing units into new, gleaming high rises and condominium complexes. This redevelopment, powered as it was by a growing financial sector and rejuvenated parks and cultural system, also created a ripple effect that was felt throughout the city and, as neighborhoods changed, so too did consumer spending habits as well as pressures. Many people who were relatively happy living in the so-called 'Bungalow Belt', for instance, felt that they had to move to larger homes in the suburbs for fear that their neighborhoods would soon begin to lose value in the face of constant development. It's for these reasons, as well as many others, that a Chicago bankruptcy crisis began to develop as the economy, particularly within the real estate sector, began to decline.
Because of these continuing problems, the need for those who may be in financial straits to understand the nature of bankruptcy law has never been greater. Unfortunately, there are many misconceptions about what bankruptcy actually is and how it has been affected by the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. Contrary to some of these popular beliefs, it is not no longer possible to declare a bankruptcy nor extraordinarily difficult if someone is in genuine financial jeopardy. The number of declarations someone can make has, in fact, been limited to once every eight years, however individuals who are still found to be without disposable income after their finances have been subjected to a mandatory 'means test' may still apply for Chapter 7 protection. As before, Chapter 7 enables individual debtors to retain exempt assets, which are usually properties considered essential to a family or individual's financial rehabilitation, while their non-exempt assets are liquidated by a trustee. In the event that someone does not qualify for Chapter 7 protection, they may still file under Chapter 13, in which case they will be expected to develop a plan to repay their creditors within 3 to 5 years but, during which, they retain all of their assets.
'Protection', of course, is the operative word during any bankruptcy. Also in contrast to what some may believe it entails, an insolvency does not equate to a complete loss of all property or the abandonment of individuals to creditors. It is not a declaration that means someone's financial future has been forsaken. In reality, bankruptcy is a form of financial protection that the government allows because the safeguards it gives to essential assets allow an individual to financially rehabilitate themselves and continue to interact with the community around them as responsible consumers and property holders.
Though in many traditional parts of Chicago bankruptcy may have, historically, been somewhat of a dirty word, the occasionally harsh realities of the modern economy have made such a declaration something no one should be ashamed of. As jobs and merchandizing opportunities have left the region, so too have many hard-working, honest people been forced to ask for help protecting the assets they need to survive. As always, the experienced attorneys in our offices are happy to consult with anyone about their bankruptcy questions, and so anyone who may be considering declaring insolvency should feel free to talk with one of them today.