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Filing for Bankruptcy a Second Time

When you are struggling with an uncontrollable level of personal debt, filing for bankruptcy is not an ideal outcome. However, it is sometimes the best outcome for your situation because it allows you to make the lifestyle changes you need to make to regain control over your finances and negotiate a fair settlement with your creditors. Whether you file for Chapter 7 or Chapter 13 bankruptcy, you will work closely with the court to ensure that your rights are protected and your debts are paid.

But new emergencies can strike and old habits die hard. It is not unheard of for an individual to find him or herself bankrupt for a second or subsequent time in his or her life. If you find yourself in this situation, know that there is a minimum time limit between discharges you can receive. In other words, if you filed for bankruptcy the first time fairly recently, you might be barred from receiving a discharge until a certain amount of time passes. Do not confuse this with a time limit on filing for bankruptcy again – you can do this at any time. But if you cannot receive a debt discharge, the second or subsequent bankruptcy could be useless.

The Chapter Determines the Time Limit

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RealtyTrac®, the leader in online real estate market data recently released its Midyear 2014 U.S. Foreclosure Market Report™. There is good news and there is bad news. The good news, as of July 2014, the national foreclosure rate dropped to 16 percent, matching the lowest level since the burst of the housing bubble in 2006.

The bad news, some states are still exhibiting a high rate of foreclosure with Illinois filling the number three spot for the first half of 2014. Although the good news supports that there may no longer be a foreclosure infestation, Illinois accompanied by Florida, Maryland, New Jersey and Nevada have yet to make it out of the formidable foreclosure forest.

RealtyTrac® data for Illinois foreclosure rates was based on a total of 42,866 properties initiating foreclosure filings during the first half of 2014. Data derived supports that at least one in every 123 Illinois homeowners were facing the reality of losing their homes or rental property, with probably a large percentage seeking the services of a qualified Illinois foreclosure attorney.

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You fought the good fight, but it was not enough. Due to financial hardship your family home has gone into foreclosure status and you are now facing eviction in your home state of Illinois. Not only are you reeling from the emotional pain associated with losing your home but you are also regretting not contacting an experienced foreclosure attorney at the onset of your financial difficulties. Now you are left wondering what happens next.

For those currently in foreclosure, without any recourse, subject to Illinois Civil Procedure Law (735 ILCS 5), take comfort that you will not be immediately forced to vacate your home, but if you choose to dig in your heels as a last ditch effort, the bank or the new homeowners are permitted to pursue eviction action against you as follows:

Self-Help Eviction

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Facing the loss of your family home to foreclosure was not part of your American dream. Every nook and cranny holds a cherished memory, but due to economic hardship you are unable to continue making your mortgage payments. You are quickly approaching the end of your 90 day grace period. There is no other recourse, the bank is planning to call in the loan. You are now facing foreclosure and can not wait for the nightmare to end, but for many unsuspecting homeowners it may continue to haunt them for another 20 years.

Perhaps impossible to comprehend, but true. A recent Wall Street Journal article chronicled the plight of Joseph Reilly, who recently lost his Florida vacation home as a result of the financial hardship due to long-term unemployment. Unable to pay his mortgage payments, the bank took ownership and sold the home. Mr. Reilly believed that would bring an end to his foreclosure nightmare, until the day the bank filed a deficiency judgement against him to the tune of $192,567.71. Mr. Reilly was now responsible for the deficit of the loan following the application of proceeds from the sale of the house.

Rarely do homeowners expect this following a foreclosure but it is becoming an increasingly reality for many. Banks are now opting to spend the necessary resources to decrease their risk factor by legally holding the original borrower accountable for the remaining balance of the original promissory note following a short sale.

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Children are observant. They tend to sense when something is wrong. The continual phone calls from creditors, the heated arguments over money, less trips to the grocery store and even less money spent on family fun. Even more so they noticed a change in you. Emotions are running high and they have been walking on eggshells.

The time has come to discuss family finances. It is not going to be easy. According to a recent article published by US News & World Report, for those contemplating bankruptcy it becomes an internal struggle with one's self-esteem most often taking a much stronger hit than the financial front. Also, neglecting the emotional side of bankruptcy can also result in long-term consequences finding yourself emotionally exhausted and dealing with immense sadness, shame and guilt. So how is this complex situation explained to your children?

As parents you instinctively want to shelter your children, protect them from challenging situations but you reached your financial breaking point. Bankruptcy appears to be your only option. Your children have sensed that something is amiss. Keep your emotions in check and call a family meeting. Consider this as a teaching opportunity to reinforce the importance of maintaining a budget. Keep in mind you will need to tailor the discussion based on your child's maturity and age level.

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