Unexpected events can often result in significant financial stress, leading to a higher amount of debt. Bankruptcy can be a practical and viable option for Chicago area residents who find themselves with debts that have become unmanageable. Deciding to file for bankruptcy is a major decision and the process can be confusing. Therefore, it is important to understand your bankruptcy options, the requirements and the steps involved.
Chapter 7 bankruptcy can be the fastest and best way to eliminate debt, but this type of bankruptcy doesn’t work for every person and every form of debt. For instance, credit card debts and overdue utility or medical bills can be discharged, but, debts such as child support, student loans or tax obligations cannot.
Credit counseling is required as part of the Chapter 7 bankruptcy process. The counseling must be done through a Department of Justice approved credit counseling agency and can be completed on the phone or online. The goal of the counseling is to provide an understanding of the bankruptcy process and the impact and potential future consequences of filing for bankruptcy.
If you decide to file for bankruptcy, you will be required to participate in two counseling sessions. The first session takes place before the bankruptcy is filed and explains the pros and cons of a bankruptcy filing. After the counseling is completed, you receive a certificate which must be presented as part of your bankruptcy filing.
The second counseling session occurs after a bankruptcy is filed, but before the bankruptcy is finalized. This session focuses on examining current income and expenses and developing a solid financial plan to avoid becoming overwhelmed by dets in the future. Additionally, helpful information is provided on budgeting, credit reports and saving money.
Learn if you are eligible
It is important to speak with a knowledgeable bankruptcy attorney to determine if you qualify for a Chapter 7 bankruptcy and if so, ensure that you take any required steps such as credit counseling. An attorney can also provide helpful information and guidance through other steps of the bankruptcy process, allowing you to move forward and make a fresh financial start.