Bankruptcy: The Last Resort or Your Only Option?

Posted on in Debt Relief

Illinois chapter 7 lawyer, Illinois bankruptcy attorneyOut of the many financial problems that can arise, no other burden is quite as consuming or stressful as debt, especially when it is a significantly large amount. It is easy to feel swallowed up and hopeless when facing such an overwhelming financial hole, which is why it is important to know when to personal bankruptcy. If your debt is too large for you to handle and you cannot seem to get out from underneath the weight, bankruptcy can offer a way out, although it is not your only option.

When to Throw in the Towel

There are three main types of bankruptcy, but chapter 7 (also referred to as “straight bankruptcy”) is the most common option for debt liquidation. This allows you to eliminate most, if not all, of your debts, but this option is of course not without consequences. First, it severely damages your credit rating. In addition, it stays on your record for 10 years. Once you have filed this kind of bankruptcy, federal law prohibits you from filing again for another eight years. These reasons combined should cause you to pause before taking such a big step. While bankruptcy is not your only option, it should definitely be your last resort.

It is recommended you consider bankruptcy under the following circumstances:

  • You have extremely high credit card, medical and other unsecured debts and you want to halt all collection activity;
  • You understand the impact that filing will have on your credit score and record;
  • You are a business owner who would like to go completely out of business and wipe out debt as quickly and easily as possible; and
  • You owe more than you can afford to pay due to unemployment, marital problems, business failure, or other circumstances that are out of your control.

Other Options

Thankfully, there are alternatives to bankruptcy, although they largely depend on your specific financial circumstances. For example, if your credit card debt in particular is the problem and is no longer manageable, you may be able to negotiate some sort of settlement with the credit card issuers. Another alternative for some individuals is loan modification. Not all lenders are willing to offer this as an option, but with the right legal representation, it might be possible to arrange an agreement.

Facing the fact that you are drowning in debt is never easy. If you are ready for some relief and need some guidance, consult an experienced Tinely Park tax law attorney today. Call the Law Offices of Eric G. Zelazny at 708-888-2299 for a consultation.

 

Sources:

http://www.illinoisattorneygeneral.gov/consumers/bankruptcy.html


https://www.cookcountyil.gov/content/legal-research-bankruptcy

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