A common reason for bankruptcy in Illinois and across the nation is job loss. Combining that with medical debt and people can quickly find themselves in severe financial turmoil. As recent events have shown with the current health challenges and economic shutdown, even people who were healthy and had a steady income can suddenly struggle financially. Bankruptcy might not have been on their radar before, but it is something to consider as the situation continues.
Recently, a growing number of people are contacting a nonprofit for information about filing for bankruptcy. This is believed to be a result of the health challenges damaging the financial circumstances of so many people. The trend is expected to continue. The company had a survey regarding bankruptcy filings. There were 1,269 people taking part. They filed for bankruptcy from March 28 to April 27. Of those individuals, 22% stated the current health crisis was the reason for the filing.
A significant number of people who filed are working in the gig economy or are service workers who are technically independent contractors and file taxes with a 1099. They have lost a vast chunk of their work if they have not lost their jobs entirely. Interestingly, the number of bankruptcies from April 2019 vs April 2020 reduced by 47%. This, however, could be misleading as people are more concerned about the necessities of life and are not considering bankruptcy during the crisis. Also, people are under the impression that courts are not functioning as normal or are reluctant to go to court for fear of getting sick.
This can happen to anyone regardless of their situation. Medical bills are growing due to hospitalizations and medical treatment. This too is a problem. The scenario for these individuals is a familiar one. They tried to reduce expenses, sell properties and considered various debt relief alternatives. Many people are confronted with the prospect of their homes being foreclosed upon and their vehicles being repossessed.
While people might try to use nonprofits to file for bankruptcy and save the legal fees that accompany a filing, this may be a mistake as there is a level of individualized service and protection that a legal professional provides. Whether the financial problems stem from current events and the accompanying medical costs and lost income or they were in place beforehand with credit card bills and other debts, legal help may be imperative. A law firm experienced in Chapter 7 and Chapter 13 bankruptcy can provide advice and guidance as to the steps necessary for a bankruptcy filing.