Are there alternatives to bankruptcy?

On Behalf of | Aug 17, 2022 | personal bankruptcy |

Even when the job market is favorable overall, Will County residents can easily and quickly run into serious financial problems.

People still do lose their jobs even in an employee’s market.

Moreover, a medical or other emergency can leave an Illinois family with one or more debts they cannot pay. Even a reversal of business fortunes or an honest miscalculation of one’s taxes can cause economic hardship.

Bankruptcy often is the best alternative for people facing these situations. A bankruptcy is usually the only option that comes with the protection of the federal courts.

A debtor will in most cases get immediate relief from collection efforts once they file their bankruptcy case. In a successful bankruptcy, the debtor will ultimately receive a permanent discharge from most of their debts, meaning they have no legal obligation to repay them.

Bankruptcy is often the most effective way to deal with overwhelming debts or debts owed to multiple creditors. However, there are drawbacks to bankruptcy.

Aside from not being allowed to file another one for a number of years, bankruptcy may involve a family having to give up some of their property or make monthly payments toward their debts for 3 to 5 years. Bankruptcy also affects a person’s ability to get credit for several years.

Alternatives can make sense in some cases

Alternatives to bankruptcy are available.  Like bankruptcy, each alternative has its own disadvantages and advantages that will depend heavily on a person’s unique situation.

Suffice it to say that sometimes it is best for a Will County resident not to file bankruptcy even if they are struggling with money.

Either way, there are some other options besides bankruptcy worth being aware of.

If a person’s credit is in OK shape or the person has some assets, it may be possible to refinance or consolidate debt.

There is also a possibility of negotiating directly with a creditor or even one-on-one with several creditors.

A creditor does not always have to negotiate, but they may have financial reasons to do so. Most creditors would rather get paid something than get paid nothing in a bankruptcy.

Moreover, sometimes a creditor may have other reasons to give their customers a deal, particularly if they broke the law when calculating or trying to collect their debt.