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Could improving economy lead to more personal bankruptcies?

It's no secret that the last few years have been quite difficult for Illinois residents in terms of their finances. Many people have had to make difficult decisions regarding which bills to pay and which to let slide; sometimes, in extreme circumstances, people might have to decide if paying for their prescription drugs is more important than having a hearty meal.

Many of these people are without jobs. Fortunately, a lot of them are able to rely on unemployment insurance benefits, at least for a while. In this case, there is little incentive for someone to file for Chapter 13 bankruptcy protection. After all, the point of entering into bankruptcy is to protect the assets that one has. If assets are slim, and someone is receiving government benefits in the form of Social Security or unemployment, then people may be content to ride out the situation until something better comes along.

That something better might manifest itself as full-time work. And that, experts say, is what drives people to strongly consider bankruptcy: getting a job. People who again have a regular income are in danger of having their wages garnished.

Overall consumer bankruptcies have ebbed and flowed over the years; 2013's numbers were less than a million total, or about 12 percent less than in 2012. Back in 2010, more than 1.5 million Americans filed for bankruptcy, while just four years earlier, the total was less than 600,000.

Personal bankruptcy, whether Chapter 13 or Chapter 7, is a big, serious step that should be undertaken only after consideration. Illinois bankruptcy attorneys can help advise clients if that is the best step for them.

Source: The Tennessean, "Bankruptcy decline could reverse amid better jobs picture," Jamie McGee, Jan. 12, 2014

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