In September 2010, there were about 1.6 million bankruptcy petitions filed throughout the country. Eight years later, that number had gone down to over 770,000 cases. However, the number of bankruptcy cases was down in Illinois and across the U.S. for a variety of reasons that individuals may not have expected. One theory is that people have fewer assets to protect compared to several years ago. Therefore, they are less likely to file for protection from creditors.

Another theory suggests that it is too expensive for most to file for bankruptcy. One attorney says that she charges $1,500 to handle a Chapter 7 case, and there may another $350 in court costs and other fees. Those who file a Chapter 13 case can expect to pay up to $3,200. It is also possible that there are more bankruptcy filings to come in the future as the economy continues to improve.

As this happens, individuals will potentially accrue more consumer credit debt. Medical debt is a common reason why a person could file for bankruptcy. Because of the Affordable Care Act, a person is more likely to be covered by a health insurance policy. Therefore, fewer individuals may be facing medical debts that they cannot afford to repay. That could potentially play a role in why the bankruptcy rate has declined.

Those who are seeking debt relief may find it by filing for bankruptcy. A bankruptcy filing may come with an automatic stay of creditor contact by phone or mail. The stay could put an end to a foreclosure or repossession, which may provide a debtor with leverage to renegotiate the terms of a secured loan. There are a variety of eligibility requirements that an attorney can outline.