Many wait too long before filing for personal bankruptcy

On Behalf of | Jun 28, 2018 | personal bankruptcy |

Financial woes can strike people from all walks of life. The rich, middle-class and the working poor can all find themselves facing overwhelming debt that leaves them unable to make ends meet. Oftentimes, this financial struggle arises from the onset of unexpected costs, particularly medical expenses. Other times, individuals are suddenly left in a tough position when they suddenly lose their jobs or their income is significantly decreased in some other way.

Although filing for personal bankruptcy can provide an individual the fresh financial start, he or she needs to get back on his or her feet, the truth of the matter is that far too many individuals wait too long to file for bankruptcy protection. A recent study found that two-thirds of bankruptcy filers spend two or more years in what is known as the “financial sweatbox.” This term refers to periods of time when individuals face the depletion of their assets, debt collection lawsuits and even forego necessities like food in an attempt to get caught up with debt.

Individuals who wait this long before filing for bankruptcy can face several challenges. To start, they face the enormous amount of stress that accumulates when one doesn’t know how to get by day-to-day and when they are facing the constant threat of lawsuit and eviction. Also, those who try to avoid bankruptcy for too long can wind up losing many of their assets that may otherwise be exempt from bankruptcy proceeding. This means that when they finish the bankruptcy process, they may not have a strong of a financial start that they otherwise would have had.

Although many associate a stigma with the filing of bankruptcy, the fact is that those who utilize it appropriately and to their advantage can benefit significantly. Illinois and Indiana residents who want to learn more about what bankruptcy can do for them can speak with an attorney who is experienced in this field.