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National numbers down but expected to rise
Through mid-December, 2020, there were 23,392 personal bankruptcy filings in Chicago, down from 37,785 in 2019. Nationally, at mid-year, there were 659,881 non-business bankruptcy filings compared with 750,878 in 2019. But with many people out-of-work and businesses closing due to COVID-19 restrictions, along with the eventual lifting of moratoriums on foreclosures, evictions and garnishments, the numbers are certain to rise in 2021.
But even beyond the pandemic, which will eventually pass as vaccines become available, why do tens of thousands of people continue to file for bankruptcy relief every year in the Chicago area?
Because too many people still have more bills than money. While the unemployment rate, currently at 6.7 % has been dropping, large corporations are still announcing mass layoffs, many people are underemployed and wages are stagnant. Unexpected medical bills can be catastrophic on the family budget, insurance doesn’t pay until large deductibles are met, and staggering student loan payments can weigh people down for decades. I’ve met many college-educated people who can’t find work in their educational field, working menial jobs just to survive.
Also, some people continue to make poor choices, running up large credit card balances with high interest rates, taking out high-interest loans on new cars they don’t need, carrying large mortgage payments on homes they can’t afford and falling to other vices, like alcohol, tobacco and gambling that deplete meager paychecks. Once they default on their payment obligations, collectors, attorneys, lawsuits, garnishments, evictions and foreclosures often follow.
For these people, a bankruptcy filing to stop creditor action, and lead to a Discharge of Debtor or a Plan to repay a percentage of debt over time, can provide welcome relief.
If you are struggling to meet your financial obligations, call the Martucci Law Office today at 630-980-8333 to schedule your free initial office consultation with attorney Greg Martucci. Learn more about Chapter 7 and Chapter 13 options and how to protect your assets from creditors under the Bankruptcy Code.