The words bankruptcy lawyer Chicago seems to strike terror in the hearts of anyone who is going through a difficult financial situation. Many people look for alternatives to bankruptcy and see it as the last option if everything else fails. Chicago bankruptcy lawyers suggest that bankruptcy should not be viewed as the final frontier, but rather as a prudent financial decision that can give you the chance to start afresh.
Some of the alternatives that people try to utilize instead of filing for bankruptcy may often place them in an even more precarious financial situation. YourChicago bankruptcy lawyer outlines the three biggest mistakes that people make when they are in debt are to:
Ignore the situation
Sign debt settlement agreements
Make more debt
Ignoring debt is the quickest way to make a bad situation worse. Debt will not go away and ignoring it may lead to legal action against your name as well as having your salary garnished and your most precious assets seized by your creditors. Speak to a professional Chicago bankruptcy lawyer before it is too late. Filing for a Chapter 13 bankruptcy is a way of protecting your assets and being able to start again without the mountain of debt hanging over you all of the time.
Signing debt agreements with your creditors is also not a wise thing to do. Many creditors may pressure you into signing agreements that tie you into paying larger amounts of interest that you need to. If there is even one default on a debt agreement, it gives the creditor a better legal stand point and you may lose your assets through legal action. Debt agreements are also not tax exempt and you will still have to pay tax on the full amount.
Making more debt in an attempt to try to cover existing debt is the worst trap, and unfortunately the most common trap that debtors fall into. Many people have lost their homes by using them as collateral for a loan that is used to pay off debt. Creating debt will never cover the debt problem that you face. All it can do is provide a temporary band-aid to a wound that is still aching.
Bankruptcy in Chicago ensures that your major assets can be protected and that any creditors do not have the right to hassle you with legal action. It effectively wipes the slate clean, and is a long term and financially prudent decision to make. Making the decision to file for bankruptcy can be a difficult one, but if you are in the situation of being unable to pay back the debts that you owe, and you have no foreseeable means of doing so in the future then declaring yourself bankrupt may be one of the best financial decisions that you ever make.
A Chapter 7 bankruptcy is the most common type of bankruptcy to file for an individual that is facing financial ruin. It is the least complex type of bankruptcy to file, but it is still best to consult with a specialist Chicago bankruptcy lawyer who has a good understanding of local laws and who will be able to protect your most precious assets.