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To help combat a rising tide of student loan debt, a Maryland Democrat has introduced a bill to make these obligations dischargeable in bankruptcy.

Representative John Delaney, who has held the seat since 2013, introduced the Discharge Student Loans in Bankruptcy Act in mid-January 2015. According to Rep. Delaney, that bill would place student loans on par with mortgage debt, credit card debt, medical bills and other dischargeable obligations. This bill is the latest in a series of measures designed to address the student loan crisis. In the previous Congress, lawmakers placed restrictions on student loan interest rate hikes and required educational institutions to be more transparent about tuition and fees.

According to a recent study, nearly seven in 10 2013 graduates carried burdensome student loan debt.


Several respected financial analysts predict that the U.S. will continue to experience a decline in the number of bankruptcy filings in 2015. Some data suggests an estimated 800,000 bankruptcy petitions will cross the judicial bench of district bankruptcy courts across the U.S. this year. For those individuals or families considering joining the ranks, understanding the advantages and disadvantages of bankruptcy or debt consolidation is the first step in either process. Consulting with a debt counseling professional or experienced bankruptcy attorney is highly advisable.

Before scheduling a consultation, the following brief summary of both options may prove helpful.

Debt Consolidation


Although the percentage of U.S. bankruptcy filings experienced a decline in the final quarter of 2014, Illinois remained ranked among the top five leading states with the highest per capita filing rate. The latest data is evident of a 16 percent decline, according to theAmerican Bankruptcy Institute (ABI) but for those Illinois residents still on the verge of petitioning for debt protection by filing for Chapter 7 or Chapter 13 protection, many questions may arise. It would be best to consult with an experienced Illinois bankruptcy attorney before making a financial decision but the top questions most likely explored by those experiencing financial hardship are, what assets would be relinquished and what assets would fall under bankruptcy exemptions?

Illinois, as all states, maintains its own set of exemptions under Chapter 7 or Chapter 13 bankruptcy guidelines. In addition to state specific exemptions, a potential petitioner may also opt to include approved provisions from the federal bankruptcy exemptions. Before consulting with a bankruptcy attorney, the following Illinois accepted exemptions may provide a deeper insight as to what filing for bankruptcy protection would mean to varying individuals. Under Illinois compiled statutes, the following exemptions apply.

Homestead Exemption


The economy may be showing some signs of improvement, but the outlook remains bleak for many Illinois homeowners. The Land of Lincoln has one of the highest home foreclosure rates in the country. One in every 663 housing units in the state received a foreclosure notice in December. Many homeowners fell behind on payments due to a job loss, sudden illness, portfolio reversal or other temporary income loss. But if you fall even three or four payments behind, it can be almost impossible to catch up. If the bank is trying to take your home, Chapter 13 bankruptcy may be your best option.

Automatic Stay

The moment you file your voluntary petition, an automatic stay goes into effect. No creditor can take any adverse action against you and no foreclosure sale can go forward without special permission from the bankruptcy judge.


The recent release of statistical data by the Administrative Office of the U.S. Courts reveal that bankruptcy filings were down by 11 percent for the 12-month period ending March 2014. The big question, however, is will the downward trend continue throughout 2015?

Time will only tell. Greg McBride, Chartered Financial Analyst® (CFA) and senior financial analyst for Bankrate.com, reveals that there has been an increased awareness on saving, as one in every six consumers are deeming financial security as a top priority.

As a means of establishing a fresh financial start in 2015 and avoiding financial pitfalls possibly resulting in personal Chapter 7 or Chapter 13 bankruptcy, McBride offers consumers numerous budget tips and saving strategies for the New Year.

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