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Lake County IL Bankruptcy Law Blog

Bankruptcy and foreclosure in Illinois

Bankruptcy and foreclosure sometimes go hand-in-hand in Illinois, seeing as how both could stem from a financial crisis. This can be caused by many different things, from an accident that brought about high medical bills to the loss of a job. Either way, the amount of money you have at your disposal is diminished, so it gets harder to make ends meet. This could mean that you miss enough payments on your home that the bank tries to reclaim it.

This is a process that is stressful and emotionally trying. If you are going through it, make sure that you take the time to know what legal options you have and what your rights look like. Do not simply assume that there is nothing that you can do without a windfall of extra money.

Study shows that medical debt leads to bankruptcy most often

When you consider bankruptcy in Illinois and the reasons why it happens, you may think of things like poor spending habits, credit card debt, poor money management or a failed career. However, according to a recent study, the biggest cause of bankruptcy in the United States is actually medical debt.

The numbers that came out in 2013 showed that around 2 million people had to file for bankruptcy based on their medical debt. Furthermore, the study showed that health insurance -- though helpful in some cases -- did not always mean that people could avoid bankruptcy due to mounting debt. Even insurance may not cover enough to make medical care affordable.

Couple sentenced for bankruptcy fraud in Eldorado, Illinois

A couple from Eldorado, Illinois, was accused of bankruptcy fraud, and they have been convicted and sentenced in the case. The man is 69 years old, and his wife is 62 years old. They went to a federal court back in the beginning of June, and both of them pleaded guilty.

Both were facing multiple charges for making false statements in the bankruptcy case. Some of those statements were given while they were under oath. The 62-year-old woman was also charged with falsifying records.

Why do people select Chapter 13 bankruptcy?

Those who have never before filed for bankruptcy in Lake County, Illinois, may find themselves thinking that all filings are the same, but the reality is that you have a few different options. One of these is Chapter 13 bankruptcy, while another is Chapter 7 bankruptcy. Before any filing, you must know what the differences are and why you would pick one over the other. For example, some of the reasons why people choose Chapter 13 bankruptcy include the following:

- They can utilize payment plans to work through the debt over time.

Why people in Illinois choose Chapter 7 bankruptcy

When overwhelming debt looms, there may not be enough that a person in Illinois can do on his or her own to get out of this financial bind. Even properly handling their money and attempting to pay off what they owe might end up leaving them in a tough spot because of interest rates and other factors. In cases like these, some people choose to file for Chapter 7 bankruptcy. Why do they choose this type of filing?

There are many reasons, but one of the top reasons is that they still get to make an income -- and keep it -- later on in life. For example, they could face financial hardships, file for bankruptcy and then start making a lot of money two years later, when they get back on their feet. Typically, lenders cannot show up and ask for that money at that time, as it is considered to be a closed case.

Why do people really get into credit card debt in Illinois?

There is a perception that people who run into credit card debt are simply not good at handling their money. However, new studies have shown that this is not the case. In fact, those studies have gone so far as to say that the people with the debt are more likely to be frugal and wise with their money than those without.

Instead, the reports showed that it was often things that people could not control that gave them so much debt.

Bankruptcy filing leaves Illinois-based lender high and dry

Truland, an electrical contractor, shut down months ago after filing for bankruptcy. The company officially filed for Chapter 7 bankruptcy, and the move has been described as being rather abrupt. Now, it has left lenders trying to get back what they can.

One of those lenders is BMO Harris Bank, which is based out of Chicago, Illinois. Back in July, records indicate that the bank was owed about $27 million. Being unable to repay that money was part of the reason that the company shut down.

Four groups of people who may file for bankruptcy

Difficult economic times make it likely that someone in Illinois may want to file for bankruptcy. One thing that is for certain is that many of the people who decide to use this method fall into four different categories -- though, of course, not everyone can be lumped into these groups. Regardless, knowing what the groups are can help people decide if bankruptcy is right for them.

First, there are those who have lost their jobs. Even though they are no longer bringing home paychecks, they could still have a lot of expenses, such as car payments, mortgage payments and the like.

Is bankruptcy governed by the state in Illinois?

The short answer is that Illinois does not govern bankruptcy itself, and no other state in the United States does either. This is something that falls under the jurisdiction of the federal government. The United States Code -- Title 11, in particular -- relates to bankruptcy, and references to it are found in the U.S. Constitution, calling for laws to be uniform across the country.

This does not mean that states are entirely cut out of the process. For one thing, state governments can make laws that impact the relationship between creditors and debtors. They simply cannot make laws that regulate bankruptcy itself.

How much does medical debt affect creditworthiness?

According to the Consumer Financial Protection Bureau, individuals with medical debt in Illinois and throughout the country may see an unnecessarily harsh hit to credit scores if that debt goes to collections. Not only does medical debt impact creditworthiness in a way that some experts say is inaccurate, but the Federal Reserve study indicated that medical debt made up over 50 percent of reported collections.

In a study of 5 million anonymous credit reports, the Consumer Financial Protection Bureau found that all that medical debt was having a harsh impact on individual credit worthiness. Specifically, creditworthiness of individuals with medical debt seemed to be underrated. The Bureau says that medical debt is treated the same as non-medical debt when it enters collections,which isn't an accurate interpretation of a person's ability to maintain accounts.

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