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Should You Consider Bankruptcy Alternatives?

Posted on in Bankruptcy

Deciding to file bankruptcy is a pivotal, life-changing decision that many people make once, sometimes even twice, in their lives. Alternatively, did you ever wonder what would happen if you didn't file bankruptcy, even though you could no longer pay your bills? Some financially distressed individuals may choose to take no action, which means creditors can file lawsuits and obtain judgments that involve garnishing wages or seizing property. However, when debtors have no wages or assets due to unemployment or retirement, this could put them in a “judgment proof” category since any legal action would be negligible. As long as you can prove you have little or no income, deciding to forego bankruptcy filing may result in no change to your situation.

For those Cook County residents who do have an income, remaining “judgment proof” is not an option. Choosing a bankruptcy alternative to get out of debt could be risky and ultimately, more detrimental to your financial condition than filing bankruptcy in the first place. Debtors can attempt to establish a stringent budget which allows them to slowly start paying debts. They can also try to negotiate with creditors by asking for reduced payments. Another bankruptcy alternative is debt consolidation, which involves borrowing enough money from one financial institution to pay off all debts. This action results in having only one payment per month instead of several. However, for people who owe more than $10,000 in credit card bills and personal loans, debt consolidation may not be feasible. Requiring such a large loan may necessitate a co-signer, which may be hard to find considering your financial situation.

The stress of drowning in debt can be emotionally and psychologically damaging. For some, considering bankruptcy alternatives needlessly prolongs the stress of dealing with harassing creditors and piles of bills laying around that you cannot pay. Contacting a professional Cook County bankruptcy attorney today to discuss a fresh start regarding your financial situation.

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