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Grayslake, Illinois, Bankruptcy Law Blog

How will filing for bankruptcy affect my job?

Bankruptcy is typically a consideration for people who are overwhelmed by debt and seeking a way to discharge or restructure it. If you are in this situation, the last thing you want to do is jeopardize your source of income and potentially worsen your financial situation. Many people wonder, though, whether filing for bankruptcy will have any effect on their job or future career prospects.

According to the United States Bankruptcy Court, there are more than 5,000 filings in a given year in Illinois alone. Needless to say, there would be many jobs on the line if bankruptcy directly affected a person’s employment. Still, there are a few things you should know about how it could affect your job.

What happens to my pension or 401(k) after I file for bankruptcy?

Perhaps you have worked hard for many years. You have accrued a nice sum in your pension or 401(k) account that should see you through retirement, which is still a few years off. So, it is natural to worry about what happens to these funds if you file for bankruptcy.

Do you lose everything? Do you risk a retirement plagued with mounting medical bills and housing insecurity? The answer is no because Illinois law allows you to keep 100 percent of your retirement accounts.

Signs That You Should Consider Bankruptcy

Question: I have never been someone who spends a lot of money. Luxury items are just not on my list. About three years ago, I got a new job that seemed very promising and stable. Finally, we had enough cash to get some new items around the house that we had needed.

We used credit cards, knowing that we could make the payments. Suddenly, from nowhere, there were layoffs and I have been without a job for over a year. Now we are struggling to pay not just the credit card bills, but basic necessities. When do you go from strapped to filing for bankruptcy?

Bankruptcy: can you keep your house?

Declaring bankruptcy sounds scary, and many people worry that they will lose everything if they do. However, bankruptcy was designed to help you. The government wants to pull you out of financial trouble and help you make a fresh start. Therefore, they allow you to keep a number of items that are considered necessities. At the same time, extravagant items may be taken away or simplified. So what does that mean for your current house?

 

Could a tax refund also mean bankruptcy?

The first three and a half months of the year are big for the tax industry, but could it also be big for bankruptcy too? Tax refunds are often used by people as a way to catch up on bills, but for those too far behind, it could provide the resources to pay the legal fees associated with bankruptcy.

Marriage and financial stability often go hand-in-hand. The divorce rate spikes from January to March, so it may be no surprise then to learn that the rate of bankruptcy filings rises at the end of tax season. Like a marriage, finances can reach a breaking point too. But, like a divorce, bankruptcy can be a fresh start for people in debt.

Bankruptcy and Child Support: Important Facts

No matter how much money you make, going through a divorce can be financially devastating and may leave you needing to file for bankruptcy. You never thought you'd be in this position but after the divorce was finalized your financial status drastically shifted and on top of it all, you're now required to make monthly child support payments.

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