Like most people, you likely did not wake up one day and find that your financial situation was out of control. Certainly, a sudden event may have started the decline, but your money woes may have worsened considerably over time before you reached a point that you felt unable to handle your affairs realistically.
Lately, you may have been considering the best possible options for addressing your financial problems, and bankruptcy may be at the top of your list. Of course, moving forward with bankruptcy is not a step you want to take lightly, so you may start with gaining more information about the option before filing a petition with the court.
You are not alone
You may feel somewhat hesitant about filing for bankruptcy because it often gets a bad rap. However, numerous people end up in need of this assistance because of serious life events that led to financial hardships. Among the most common reasons that individuals file for bankruptcy are medical expenses, divorce and unemployment. In fact, medical bills play a part in approximately 50% to 60% of bankruptcy cases.
Of course, other people's situations may not necessarily make you feel better about your own. Still, knowing that bankruptcy is a proven and legal avenue for handling overwhelming debt may bring you some sense of relief.
Qualifying for bankruptcy
It may come as somewhat of a surprise to learn that you must qualify for Chapter 7 bankruptcy. However, this type of bankruptcy is not the best fit for everyone, which is why you must take certain steps to determine whether it could suit your circumstances. In particular, you will need to show that your income lands below the state median in Illinois or that you cannot repay your debts based on your income and expenses in order to qualify for this assistance.
Better than worse
Often, people worry that filing for bankruptcy will make their financial situations worse because it lowers their credit scores and goes on their credit reports. However, if you have reached a point where you are missing monthly payments, defaulting on loans or are experiencing other similar financial difficulties, it is likely that your credit is already in a tough spot. As a result, bankruptcy may not have as much of a negative impact as you suspect.
If you believe that Chapter 7 bankruptcy could help your situation but you still feel hesitant about moving forward with the process, you may want to speak with a bankruptcy attorney. A legal professional experienced in this area of law could provide you with reliable information about the process and how it could affect your circumstances.