Illinois has the fourth largest economy in the United States, as measured by gross state product. Its economy is highly diversified and has proven resilient throughout times of boom and bust alike.

Illinois has traditionally been one of the most self-reliant states. Large seams of coal drove the development of the nation’s largest region of steel and iron production during the 19th and 20th centuries, an industry which continues to do brisk business today.

Illinois is also home to many companies in the finance, insurance and real estate sector. Chicago features some of the most expensive zip codes in the country, with median household incomes exceeding $100,000. And despite massive losses of manufacturing jobs elsewhere in the Midwest, Illinois continues to host a thriving manufacturing industry, with hundreds of billions of dollars in goods produced.

The state has a somewhat high unemployment rate, at 6%. The state also suffers from generally high costs of living, and those are not just restricted to the greater Chicago area but are increased by it. Overall, Illinois comes in fourth in rankings of the states with the highest rates of personal bankruptcy. There are a number of reasons for this, some of which have already been mentioned. But another factor is that, like many highly urbanized states, Illinois has an entrenched underclass, primarily made up of minorities and illegal aliens, whose members tend not to participate in the official economy and often live below the poverty threshold. This implies that the nominal unemployment statistics aren’t telling the whole story.

For Illinois residents who fall on hard financial times, it may be tempting to run for the safety promised by the state’s bankruptcy courts. However, there are often far better means of dealing with outstanding debts that are difficult to pay down. Let’s take a look at some ways in which debt can be relieved within the state of Illinois.

Four strategies for debt relief in Illinois

Broadly speaking, there are four main courses of action that you can take to relieve yourself of outstanding debt that has proven difficult to manage. Bankruptcy is just one of these. The other three are to do nothing, to pursue debt consolidation or to initiate a debt settlement.

Ignore it and it will go away, sort of

The first and easiest way to handle debt that you are unwilling or unable to pay is simply to ignore it. Many sources would consider this to be awful advice, and it is, if the amount in question is greater than about $1000. However, if it’s less than that, the chances of a creditor initiating vigorous collections activity against you is extremely slim. In practice, a creditor is unlikely to expend great resources trying to collect on a $300 debt. In fact, even the most dogged collection agencies will simply give up after a while, even if it takes a year of unanswered calls.

The only downside to ignoring creditors is that it will hurt your credit score. But that isn’t a problem if you’re committed to rebuilding it. Just remember, you cannot ignore debts greater than about $1,500, and anything over $1000 runs the risk of collection actions with teeth.

Debt consolidation can save money

If you owe a creditor more than about $1,500, you can safely assume that it’s almost guaranteed they will take you to court if you refuse to pay. But if you still have sufficient income, debt consolidation can reduce the interest rates on your private, unsecured debts. In some cases, it can even reduce the principal amount.

Settle it out of court

If you don’t have enough income to pay off your debts in three to five years by using consolidation, debt settlement may be an attractive alternative. Unlike with consolidation, debt settlement will put major blemishes on your credit score, possibly dropping it by up to 150 points. The good news is that you can almost always seriously reduce the principal amount owed, sometimes by up to 75%. This can allow you to get out of debt much quicker while avoiding all the troubles of bankruptcy. The only other risk with debt settlement is that creditors can still sue you.

Go nuclear

Finally, that brings us to the nuclear option, bankruptcy. If you’re genuinely insolvent, bankruptcy will clear all of your unsecured debts and may even allow for you to keep your house and your main car. But it’s a nasty remedy.

You won’t be able to get unsecured financing, including for business ventures, for up to ten years. If you’re in business, you’ll often probably run into your stiffed creditors around town, leading to a sense of profound shame and dealing with people who may harbor bad feelings towards you.

For these reasons, bankruptcy should be a last resort. But for some people heavily in debt, it’s still the only option that makes sense.