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Bankruptcy fraud is a very serious matter. Federal authorities investigate and prosecute this crime very aggressively. So far this year, defendants in fraud cases have been sentenced to more than 30 years in prison and paid over three million dollars in fines and restitution.

Bribing a Trustee

These instances are rare, but certainly not unheard of. In addition to offering a trustee or other court-appointed official money or other property in exchange for looking the other way, some debtors offer jobs to a trustee's friend or relative or make some other indirect effort to exert undue influence.

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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).

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If you are currently considering debt relief through the liquidation of personal assets by petitioning for Chapter 7 bankruptcy protection, federal law mandates that you first seek pre-bankruptcy credit counseling and post-filing debtor education.

For all states, only excluding Alabama and North Carolina, The United States Trustee Program, under the jurisdiction of The U.S. Department of Justice, sanctions a number of approved credit counseling and debtor education programs. These non-profit organizations are available to the public through agency advertising confirming their association with the Trustee Program.

To determine which agency may be the best option for you, consult with your qualified bankruptcy attorney to review the list of approved credit counseling providers available online or through the bankruptcy clerk's office within your assigned district.

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As per iStockAnalyst, an Oregon based online subsidiary of Wall Street Tools, LLC, Fitch Ratings recently reported that consumer bankruptcy is expected to continue to decline throughout the remainder of 2014. Fitch Ratings, a global rating agency, attributes the decline to lower unemployment rates coupled with a recovering economy. Personal bankruptcy rates are expected to decline by eight to 10 percent, marking the fourth consecutive year of lower instances of personal bankruptcy protection petitions.

Although 2014's projected decline is not as significant as the notable 12.6 percent decline for 2013, Fitch reports that the trend is expected to hold steady as banks relax underwriting standards as a means to lessen the burden on the American consumer, as well as extending larger personal credit lines. The Fitch Ratings report also indicates that this downward trend could potentially impact the number of personal bankruptcies significantly.

This trend supports the lowest bankruptcy rate since 2007 and may be further contributed to a more “prudent” approach to personal consumerism. Fitch Senior Director Steven Stubbs believes that consumers are considerately more reluctant to adjust their Debt-to-Income Ratio (DTI) by increasing the limit of personal credit available. Stubbs further attributes this to the lack of wage growth in the labor market, which is evident as consumer consumption rates continue to decline.

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Admitting your debt has spun out of control and realizing you are financially incapable of managing your liabilities can often lead to moments of sheer frustration and uncertainty. It takes a personal leap of faith to place your trust in an experienced bankruptcy attorney, but it may be a necessary step in stabilizing your financial situation.

If you are an Illinois resident considering bankruptcy, take note that every U.S. state requires completion of credit counseling before filing for bankruptcy. The counseling must also occur 180 days before filing, and you will be required to submit your completion certificate to the presiding bankruptcy judge. This action is enacted under the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (Public Law-109).

Once credit counseling has been completed, your next step is to contact a qualified bankruptcy attorney to discuss your options. Choosing an attorney that will best suit your needs may seem daunting but beginning the process should not prove yet another stressor. It is a step in the right direction.

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