Bankruptcy Considerations When Your Debt is Under $15,000

If you owe less than $15,000 combined to creditors, should you be thinking about filing for consumer bankruptcy? According to an article in Bankrate.com, personal bankruptcy can provide much-needed debt relief to many Chicagoans, but it may not be the best option for all debtors. Let us say first that the figure of $15,000 is an arbitrary one that we are using as a hypothetical example for discussing the pros and cons of filing for bankruptcy. At the same time, however, it is important to consider the amount of debt you owe when consider whether you are eligible for bankruptcy protection, and whether it is the best course of action for you.
Weighing the Relief of Bankruptcy with its Credit Implications
Generally speaking, if you do not owe a substantial amount of money to your creditors, filing for personal bankruptcy may not be the most suitable route for you to take. While $10,000 or $15,000 in debt can seem like a lot of money, working with your creditors to repay what you owe may be preferable to dealing with the credit implications of filing for Chapter 7 bankruptcy. If you are thinking about filing for bankruptcy, you should always speak first with a dedicated Chicago consumer protection attorney.
What are some of the pros and cons of bankruptcy, particularly if you do not owe a substantial amount of money? According to the article, you should consider whether the following issues would be preferable to finding ways to pay off your debt:
  • Having a consumer bankruptcy filing on your credit report for up to 10 years;
  • Difficulty obtaining credit in the immediate period after you file for bankruptcy;
  • Inability to obtain a mortgage loan for a certain number of years after filing; and
  • Facing a waiting period before you would be eligible to file for bankruptcy a second time.
In addition to bankruptcy protection following you in the years after you file, a liquidation bankruptcy also will result in giving up all property aside from that which is exempt under current bankruptcy law. As the author of the article argues, some debts are “just not large enough to justify the damage.” But of course, such an argument is always going to be subjective. What is a big enough debt to justify filing for Chapter 7 bankruptcy?
Alternatives to Consider When You are Thinking About Consumer Bankruptcy
If you are not sure whether the amount of debt you are currently carrying is sufficient enough to consider filing for consumer bankruptcy, an experienced bankruptcy lawyer can help. A consumer protection advocate can also help you consider alternatives to bankruptcy if you simply do not owe enough to liquidate. According to an article in U.S. News & World Report, the following are common alternatives to bankruptcy that consumers may want to consider:
  • Settling or negotiating your debts with your creditors;
  • Selling some of your property in order to pay off your debts;
  • Borrowing money from a family member or close friend in order to pay off your debts;
  • Refinancing or restructuring your mortgage; and
  • Making other personal sacrifices to save enough money to become debt-free.
Personal bankruptcy is complicated, and it is important to discuss your options with an experienced bankruptcy lawyer in Oak Park. An advocate at the Emerson Law Firm can answer your questions today. Contact us to learn more.
See Related Blog Posts:
Limitations of Chapter 7 Bankruptcy

Comments

Post a Comment

Popular posts from this blog

Payday Lending and Predatory Lenders in Illinois

If you are in substantial debt in the Chicago area and are living in a paycheck-to-paycheck cycle, you may have taken out a payday loan to make ends meet. While payday lending is illegal in a number of states due to the predatory nature of these loans, it remains legal in Illinois. As a result, many debtors in the state have used payday lenders, and far too many of those borrowers cannot repay what they owe. According to a recent article from Progress Illinois , consumers have filed complaints about payday lenders in the state, illuminating a need for federal rules that address harmful lending practices . Predatory Payday Lenders and Protections for Consumers Due to the perceived predatory nature of payday loans, twelve states in the country have banned these lenders from operating completely, according to a fact sheet from loans.org . The states that currently have laws prohibiting payday lenders from operating include Arkansas, Arizona, Connecticut, Georgia, Mary...
Read more

Phantom Debt Collection Scams on the Rise in Illinois

Have you been contacted by a person claiming to be a debt collector who is seeking to recover a debt you allegedly owe? If so, you are not alone. According to a recent report from CBS Chicago , such parties claiming to be debt collectors are on the rise, and they are scamming Chicago-area residents. These alleged debt collectors are part of schemes known as “phantom debt collection scams,” since they involve the attempt to collect on a debt that the consumer does not actually owe. How can you avoid becoming a victim in a debt-collection scam ? What should you do if you have been targeted by a fake debt collector? How Do Phantom Debt Collection Scams Work? Now, you might be thinking to yourself: I would never agree to make payment on a debt that I did not owe. But the scam is not always that simple. Parties at the center of debt-collection scams often target consumers who do actually owe debts (to someone or to some entity), and they prey on the fact that these c...
Read more

New Information on Debts That Bankruptcy Cannot Discharge

If you are thinking about filing for bankruptcy in the Oak Park area, it is important to know that certain kinds of debts cannot be discharged in a bankruptcy case. Under U.S. bankruptcy law, these are known as non-dischargeable debts, or exceptions to discharge. There are certain types of debts that have long been identified clearly as non-dischargeable debts, while there are misconceptions about other types of debts that may or may not be dischargeable. As an article in CNBC discusses, the U.S. Supreme Court recently issued a ruling in the case of Bartenwerfer v. Buckley , which clarifies that debts incurred due to another party’s fraud cannot be discharged in an individual’s bankruptcy case. Our Oak Park bankruptcy attorneys can explain the Court’s recent ruling and provide you with additional information on dischargeable and non-dischargeable debts. Supreme Court Says Debt Incurred Due to Another’s Fraud is Non-Dischargeable The recent Bartenwerfer case involved a debtor attempti...
Read more