If you are behind on your bills and thinking of filing Chapter 7 bankruptcy, keep in mind that you do have alternatives to bankruptcy. Bankruptcy should be a remedy of last resort not of first resort. There is a hit on your credit if you file for bankruptcy and you will pay a higher interest rate for a number of years after filing. In some cases, bankruptcy is the ultimate option. Be careful, however, because you will hear a lot of advertisements claiming to help you only to find out that they work for the credit card companies. Look into all of your options and do not take anyone at their word without doing some homework first.
Probably the most common alternative is to try and work an installment payment plan with whichever creditor is bringing the most heat upon you. Since not all creditors will file a lawsuit, focus your efforts on the ones that will or are bringing suit. These creditors have shown that they are aggressive and are actually expending court costs and sheriff’s fees in an effort to collect against you. They are not simply calling on the telephone trying to extract a payment. They are forcing you to consider getting bankruptcy advice.
Another alternative to filing is to contact a debt settlement company. Although it can be a mistake for many, there are some clients who can be helped through this service. It really depends upon the type and amount of debt and the client’s ability to make month payments over an extended period of time. It is similar to Chapter 13 bankruptcy without the need to actually file for bankruptcy. You can compare your repayment options by seeking the advice and counsel of an Illinois bankruptcy attorney. If the amount is going to be equal, then you really have to consider the repayment outside of bankruptcy option.
The final alternative is to do nothing. That is right. You may be able to get by doing nothing. Let’s take the case of someone who is on social security or disability and has no other type of income. That person is basically collection proof. The credit can get a judgment against the debtor; however, it cannot garnish the type of income that I mentioned above. If you would seek the advice of a Chicago bankruptcy lawyer, that lawyer should reiterate that information. If the attorney tries to convince you to file because the income is at risk, you will know that the attorney is giving you false information in an effort to get you to file bankruptcy.