Illinois, like all states, has provisions allowing individuals to file for bankruptcy. The laws recognize that life doesn’t always work out the way we expect it to. Financial problems can crop up for any number of reasons and individuals and companies need a legal way to seek relief so that they can get back on a positive track.
Many visiting this blog for the first time may have a lot of misgivings and misconceptions about bankruptcy. One of the common myths people have about the process is that it is a one-and-done thing. The reality is that individuals are not limited to filing for bankruptcy protection only once. However, there are waiting periods that have to be met between filings and they can be easily violated if care isn’t taken.
The consequences of improperly filing are not something to dismiss lightly, as one case out of Texas can attest. According to the U.S. attorney for that jurisdiction, seven individuals were recently indicted by a federal grand jury alleging they filed for bankruptcy multiple times with the objective of blocking creditors from foreclosing on various properties.
The automatic stay against foreclosure is one of the benefits of filing for bankruptcy, but in this case authorities say the defendants committed fraud by failing to take any further action. The indictment alleges the defendants filed numerous cases, including 12 in five years, and never made any payments to creditors as called for by their approved discharge plans. If these individuals are convicted, they could face years in federal prison and fines in the hundreds of thousands of dollars.
To be clear, filing for bankruptcy is legal if it is done correctly. If you need to learn what your options are in this regard, we urge you to contact an experienced bankruptcy attorney.