How can I avoid filing for bankruptcy in Illinois?

Filing for bankruptcy in Illinois can give you a fresh financial start, but it can also carry with it some serious adverse effects. Bankruptcy can do significant, lasting harm to your credit score and it will cost you money.

If you are struggling with your finances, you should know that bankruptcy should be the final solution – not the first one. The Federal Trade Commission suggests the following tips and alternatives to bankruptcy

  • Work with a reputable credit counseling service, which can help you develop a budget and manage your money.
  • Try to avoid a home equity line or taking out a second mortgage, because it will put your home at risk.
  • Contact your creditors to determine if you can negotiate a payment plan.

Creditors may be willing to make changes, such as extending the amount of time you have to pay a debt or lowering your interest rate. This could give you the help you need to get your finances in order.

If you have exhausted all these options, then you may want to talk to a professional about filing for bankruptcy. According to the U.S. Bankruptcy Court for the Northern District of Illinois, you will still need to take a credit counseling course prior to filing. You will also have to take a debtor education course after you file.

Experts suggest going over your situation with a professional to determine which route may be the best for you. There can be serious financial implications associated with every option you have. While this information may be useful, it should not be taken as legal advice.

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