Medical debt is something with which many Americans struggle. For some individuals in Illinois and elsewhere, the amount of medical debt owed may be so much that they cannot possibly pay it back under their current financial situations. For these individuals, Chapter 13 or 7 bankruptcy options may be appropriate ways to seek relief.
Anyone in Illinois who is looking for financial relief has probably seen or heard advertisements for debt settlement programs. These are offered by firms who claim that they will work with one's creditors in order to lower and pay off one's debts. All they ask is that payments go directly to them and not to one's creditors. While the idea may sound appealing, the reality of it for many people is anything but. What really is better, trusting a debt settlement firm or just taking the leap and filing a Chapter 13 or other type of bankruptcy?
Bankruptcy filings can a take a bit of time to put together properly. However, there are those in Illinois who may not have all the time in the world to wait. Sometimes, due to creditor threats of foreclosure or repossession -- among other things -- there is a need to file for Chapter 13 bankruptcy protections immediately. If you are in such a position, an emergency filing may be right for you.
Sometimes people do not want to step back and take a look at where they are really at financially. It is just easier to keep putting things on credit and pay things off if their budget allows. Unfortunately, living this way can take its toll over time. When it all becomes to much to handle, for some Illinois residents certain debt relief options may be the only way out -- such as a Chapter 13 filing for example.
The phone keeps ringing and notices keep arriving. Once an Illinois resident gets behind in paying bills, it is difficult to get caught up. Many times, what began as a minor financial crisis turns into a nightmare that just will not end. As the financial crisis becomes more severe and creditors continue collections efforts, filing for Chapter 13 bankruptcy may provide the answer to the financial dilemma.
We've previously discussed some of the basic requirements for filing a bankruptcy case under Chapter 13 of the federal bankruptcy code in Illinois, including the debt limits for different types of debt, and the fact that the debtor should not have failed to appear or comply in a similar case in the prior 6 months. We've also touched on some of the differences between a Chapter 7 filing, which is sometimes called a 'liquidation,' and a Chapter 13 restructuring of debt.
When most Illinois residents hear the term 'bankruptcy,' they likely picture a liquidation, where all a person's major possessions are sold to pay off his or her debt. While a Chapter 7 filing might require some of that -- though there are exemptions for certain property -- there are other types of bankruptcy filing as well. One of these is a Chapter 13, or 'wage earner's plan.' This types of filing allows the debtor to submit a repayment plan that proposes to pay some part of the debt over a certain number of years, usually three or five. One advantage of this kind of filing is that, under certain circumstances, it can stop a foreclosure or other repossession action.
Life can get expensive in a hurry. Many people today live paycheck to paycheck because the cost of living is so high in relation to their incomes. While this may sustain many for a time period, if anything unexpected happens, it can send a person's financial situation into a skid. Declaring Chapter 13 can help to get those suffering under the weight of debts a fresh financial start.
For many Illinoisans considering whether to file for Chapter 13 bankruptcy, one of the key issues is their credit scores. Or, more specifically, bankruptcy's deleterious effect on those score. But just how serious are these concerns? Let's explore that further.
When Illinoisans file for Chapter 13 bankruptcy (in addition to bankruptcy under other chapters), they benefit from an automatic stay. This stay prohibits creditors from trying to collect on the debt. That means the end of harassing phone calls and a pause in any litigation, including foreclosures.