Alternatives to Bankruptcy

DuPage County Bankruptcy Lawyers for People Seeking Financial Stability

Bankruptcy is an option for those struggling with debt. However, exploring alternatives to bankruptcy can help you to find the best solution for your financial situation. At the Bankruptcy Center of Illinois, we clearly explain different approaches to tackling debt, including bankruptcy. Our dedicated attorneys represent people throughout DuPage County and nearby communities seeking help in managing their debt. We are committed to helping individuals and small businesses overcome their financial challenges.

Alternatives to Bankruptcy

Alternatives to bankruptcy may focus on stopping harassment from creditors, working on repayment of debt, and negotiating with creditors directly. If creditors are harassing you, you may consider exploring options under the Fair Debt Collection Practices Act. In some situations, filing an action against a creditor can stop their collection efforts. There are federal and state debt collection laws designed to protect people from harassing debt collection conduct.

Working with creditors directly is another possibility. If a debtor owns income or property, they may be in a position to work out a repayment plan with a creditor. Often, debt can be paid off in smaller installments. Or, it may be an option to negotiate debt to an amount that is more manageable based on your finances. For example, creditors appreciate that debtors filing under Chapter 7 bankruptcy may be unable to repay debt. This is because the majority of their assets will be exempt. If the debtor thinks their financial situation may improve, and is willing to work out a repayment plan, the creditor may be motivated to settle for a lesser amount.

Receive Assistance From Debt or Credit Counseling Agencies

A credit or debt counseling agency can assist if you need to confront a creditor. If you doubt your negotiation skills or feel the process is too challenging, a credit counseling agency can help. Their specialty is helping debtors who seek financial stability without filing for bankruptcy.

Similar to a Chapter 13 bankruptcy, a credit or debt counseling agency can develop a debt management program to assist people in managing their finances. A main advantage of working with a debt management program over Chapter 13 is that your credit record will not show that you filed for bankruptcy.

There are disadvantages to utilizing a debt management program. The program will likely require that you repay the full amount of your debts. If you miss a payment, you will be vulnerable to any collections efforts. In comparison, Chapter 13 bankruptcy provides debtors flexibility should their financial situation change.

It is important to ensure the legitimacy of a credit or debt counseling agency. Prior to signing up for services with a company, look into their track record. A list of agencies that are approved by the U.S. trustee can be found under the Credit Counseling and Debtor Education section of their website.

Judgment Proof

Individuals that have few assets or very little income may be judgment proof. A creditor cannot collect a debt from an individual that is judgment proof. Even if a creditor secures a judgment against you, they will not be able to take away basic necessities of life. These include food, clothing, government benefits, unemployment benefits and other income or property that helps ensure your health and safety. In other words, even if a creditor sues you and obtains a court judgment, they cannot collect from you because you do not have anything of value for them to take.

Consult an Attorney in DuPage to Learn More About Alternatives to Bankruptcy

If you are considering alternatives to bankruptcy, we can help you understand your options. Our skilled DuPage County attorneys are here to help you throughout the process of researching your options and pursuing the right course of action. Call us at (773) 993-0024 or reach us online today. We proudly represent people throughout Cook County and surrounding areas.