The Debt Consolidation Alternative

If your debts are mounting and you don’t think you’ll ever be able to pay them, you’ll probably start thinking about filing for bankruptcy. Bankruptcy isn’t for everyone, and it may not be your only or best option. What’s best for you will depend on your current and expected income, the type and nature of your debts, and the assets and property you possess. Before you make any final decision about bankruptcy, discuss your legal options and rights with an experienced Chicago bankruptcy lawyer.

If you qualify, you may want to consider a debt consolidation loan as an alternative to bankruptcy. You make a monthly payment to the lender, and the lender satisfies your creditors. Make certain that you borrow only from a reputable, established lender – do the research. You may also be able to improve your situation with a second mortgage or a home equity line of credit, but don’t do this in haste. Think about it carefully, because the lender will require your home as collateral, and if you can’t make the payments, the lender can take your home.

However, if you have more equity in your home than you can protect in a bankruptcy, you might want to consider seriously the debt consolidation option. If your equity exceeds the amount of the Illinois home exemption, a Chapter 7 bankruptcy compels you to give up your home, and a Chapter 13 bankruptcy requires you to create a debt payment plan that can be completed in 3 to 5 years. Debt consolidation – if you can make the monthly payment – lets you escape the risks and complications of bankruptcy. If you are in or near the greater Chicago area, and if you face mounting debts and you cannot pay them, discuss your debt consolidation and bankruptcy options with an experienced Chicago bankruptcy lawyer as quickly as possible.