03.01
Bankruptcy is a legitimatize strategy to deal with overwhelming, burdening, beyond the pale amounts of debt that can crop up during your life. Bankruptcy solves a hopeless situation by eliminating your debt (chapter7) or allowing you to refinance that debt (chapter 13) so that you can continue to earn and save money with a blank slate behind you. Though an Illinois lawyer will of course caution you that the process is involved and also involves credit damage and other considerations, there are numerous unexpected life events that can result in a true need for Bankruptcy declaration.
1) Medical Emergency. If you are carrying a significant amount of consumer debt, but a manageable amount, and are suddenly faced with the overwhelming cost of medical treatment in the United States, your bills may suddenly jump from manageable levels to unmanageable levels. When that happens bankruptcy can reset your system, except for certain exempt debts, and give you a fresh start for repayment.
2) Job loss. If you lose your job, rather than adding sudden expenses, you will lose your income—which results in roughly the same situation until you can find new employment. If you lose your job and are facing significant debt the courts are typically favorable to your plea and will help give you the slack you need.
3) You experience a divorce. Bankruptcy and divorce go hand in hand. Divorce divides people and their earning potential, requiring each to pay for their own shelter, utilities, and food where before resources were pooled and expenses shared. Don’t underestimate the financial impact of divorce on your lifestyle.