Citing widespread abuse of Chapter 7 and a cultural loss of the “shame” toward filing, Congress dramatically overhauled the existing bankruptcy system in 2005. The goal was to not only reduce the total number of personal filings, but to also steer more people who did in fact declare into Chapter 13 reorganization bankruptcies. This bankruptcy type is preferable (in the eyes of legislators and lenders at least) because the creditor is paid back part or all of what is owed on a debt payment plan. The bankruptcy changes ultimately means that more Illinois consumers will (and have) be required to pay off their debt while still suffering the negative credit effects of bankruptcy. So who specifically does this affect? Under the new law, consumers who earn more than the median income in their state must pass a means test to determine whether they can afford to pay back their creditors through a Chapter 13. Listed below is the median income information in Illinois as of 2006: 2-person families: 54,979
3-person families: 64,763
4-person families: 75,484

6-person families: 66,841
7-or-more-person families: 66,977

Illinois Consumer Credit Counseling Services
Illinois Bankruptcy Laws
Illinois Debt Collection

Bankruptcy Figures in Illinois

2004: 79,320
2005: 105,964
2006: 29,774

Illinois is a state that has a high number of personal bankruptcy filings each year, even when accounting for the fact that it has a relatively large population. There are a wide variety of reasons for this, much having to do with the aggressive marketing activities of bankruptcy lawyers in the state. Despite this fact, the decrease in filings following the passage of the bankruptcy legislation was significant. From 2005 to 2006, the total consumer filings fell by 75.6 percent, which was right in line with the national average.