Record Debt Drives Record Bankruptcy Filings in Illinois

High unemployment, credit card debt, and foreclosure to blame

By Elliott Beazley
|  Monday, Nov 1, 2010  |  Updated 12:30 PM CDT
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Record Debt Drives Record Bankruptcy Filings in Illinois

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Bankruptcy filings in northern cities and suburbs are skyrocketing, as large debts force Illinoisans to file for Chapter 7 and Chapter 13 protection in greater and greater numbers.

The first and second quarters of 2010 saw exponential growth in the number of consumer bankruptcy filings. There was a 29% increase in the number of Chapter 7 filings and a 16% increase in the number of Chapter 13 filings, compared to the first and second quarters of the previous year.

Central and Southern Illinois had fewer Chapter 13 filings over the past two years, and Southern Illinois individually had less filings overall, according to the American Bankruptcy Institute.

The nation as a whole saw an increase of 15% for all personal filings, highlighting the particularly worrisome numbers in Northern Illinois, including Chicago and the suburbs.

The increased amount of debt that consumers take on has made keeping homes during tough economic times more difficult, according to the Daily Herald.

In the past, someone who was laid off would seek bankruptcy protection and then promise to make monthly payments on their mortgage. But due to increased debt, consumers are having a tough time meeting any large financial obligations.

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