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Decrease in Bankruptcy Filing Rates

Posted on in Arlington Heights Foreclosure Attorney

The bankruptcy filing rate is at its lowest point in seven years for most everywhere in the country, except for the Land of Lincoln and a few other states.

November 2014 filings were down 16 percent, when compared to November 2013. Much of the decrease was due to a much lower commercial bankruptcy filing volume. These new filings were down 27 percent. One observer pointed to a combination of high filing costs, low consumer spending and low interest rates as being primarily responsible for the decline.

Illinois, however, had the fifth-highest per capita bankruptcy filing rate in the country. Its 4.72 filings per 1,000 people was eclipsed only by Tennessee (6.22), Alabama (5.34), Georgia (5.30) and Utah (4.93).

Why People File Bankruptcy

Three Southern states in the top five is not surprising, as many states in this region have household incomes that are consistently below the national average, and Utah has an above-average number of bankruptcy filings almost every year. But Illinois is a stranger to this list. Probably not coincidentally, the Prairie State has one of the highest unemployment rates in the country.

Even a temporary job loss can wreak havoc on middle- and working-class finances. There was a time when families had savings and/or access to credit which enabled them to weather temporary financial storms, but that time has passed. In addition to unemployment, some common reasons for bankruptcy filing include divorce, medical bills, and a death in the family.

All these factors have at least one thing in common: they are, for the most part, totally beyond the debtor's control. Almost no one asks to be laid off from a job, go through a divorce from a spouse, be injured in an accident, or suffer through a long-term illness, but these things happen.

That being said, it is still your responsibility to take care of outstanding debt that you cannot pay. A Chapter 7 or Chapter 13 bankruptcy can eliminate much of your debt, let you set up your own payment plan to take care of the rest, and basically give you and your family the fresh start you deserve.

Take control of your financial future by calling the experienced Libertyville bankruptcy attorneys at Newland & Newland, LLP, for a free phone consultation.

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