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Chapter 13 may help when other debt relief options do not

This is the year -- the year to get out of debt. Becoming debt free is a New Year's resolution that many Illinois residents set every year. Some meet that goal and others do not. For those who have the desire to join debt free society, there are ways to get it done. If certain debt relief options fail, a Chapter 13 bankruptcy may be a viable option.

According to a recent news report, there are a few relatively simple things a person can do to help improve his or her financial situation. The first is to focus on paying off one debt at a time. The Journal of Consumer Research published the results of a study back in 2016. It indicated that focusing on just one account at a time helped debtors pay off debt faster as they felt they could actually see their hard work pay off. In other words, paying off one account was great motivation to keep paying down other debts.

The second suggestion is to pay off small balances first. This is called a snowball approach. By paying off smaller debts first, it leaves one feeling accomplished. Whereas, if one works toward paying down accounts with the highest debt amounts first, one may not feel he or she is really making any progress.

Finally, money mindfulness is also important. It is easy to just put every charge on a credit card and not really think about it. Money mindfulness is knowing how much one has to spend, not spending over that amount, discerning wants from needs and knowing where every penny is going. Practicing money mindfulness can make a significant impact in the long run.

Now, taking steps to get one's finances under control is great for everyone to do. Sometimes, though, there are those in Illinois and elsewhere whose debt situations may not be helped by budgeting alone. When debt obligations are too much a Chapter 13 bankruptcy -- if approved -- can help create a truly affordable repayment schedule for one to follow and even allow for some debts to be discharged, offering true and timely debt relief.

Source:, "7 smart tips for getting out of debt in 2018", Brittney Laryea, Jan. 4, 2018

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