Consumers in Chicago Declare Bankruptcy For a Variety of Reasons
The popular image of someone in the process of bankruptcy is a picture that involves one too many fast cars or nights out on the town. Indeed, there are consumers who have had to face insolvency because their lifestyle far exceeded their income or financial resources. Most bankruptcy filers, however, are simply regular people who have had to face a sudden and unplanned loss in financial resources because of business failures or extended health difficulties. This is especially true for people living in the Midwest, as the residents of Chicago declare bankruptcy for many reasons that are directly related to the decline of industry and stagnation within the region's financial services sector.
Fortunately, bankruptcy protection exists as a means for helping these families regain their financial footing. Contrary to some erroneous beliefs that the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 prevents individuals from declaring bankruptcy if they have any income at all, it merely uses a 'means test' to make sure that Chapter 7 protection is reserved for those who have no disposable income. Other individuals, however, can still petition the courts for Chapter 13 bankruptcy, a type of protection that is perhaps best suited for many working families in the Chicago area. Also known as a 'Wage Earner Bankruptcy', Chapter 13 allows for the retention of all assets so long as the petitioner can develop a plan to repay their creditors within 3 to 5 years. As many families in the Midwest that have had to declare bankruptcy have at least one wage earner and have also purchased assets that they see as investments rather than luxuries, this type of bankruptcy may be in their best interest.
The details of an individual or family's situation determine what type of insolvency declarations they should make, however, and as the reasons they have arrived at bankruptcy differ, so do the solutions that can be followed to lead them out of it. Though BAPCPA mandates that those in the bankruptcy process receive credit counseling from a pre-approved agency, it may also be in the best interest of those who believe they may be facing bankruptcy sometime in the near future to consult with such an agency beforehand to see if insolvency can be staved off.
Barring a financial reorganization, change in income, or debt settlement that can prevent bankruptcy, though, families that feel they must declare either Chapter 7 or 13 should take the time to consult experienced bankruptcy attorneys like the professionals at our offices. Bankruptcy, after all, is more likely to lead to a successful financial rehabilitation if its initial filing and subsequent agreements were written and negotiated in ways that are advantageous to their claimants. Though there are many detailed books about bankruptcy law that are currently on the shelves at libraries and book stores, the fact that each family's insolvency situation is different is the precise reason why experienced counsel can always help with any case.