The Impact of Delaying Filing For Bankruptcy

On behalf of Trenton Grand of Grand Law Firm posted in Bankruptcy on Tuesday, September 25, 2018.

Louisiana residents who have overwhelming debt may be reluctant to file for bankruptcy, as they believe that doing so implies that they have failed personally and financially. They may attempt to avoid or postpone filing for bankruptcy, which can make their situations worse.

The results of a study show that the longer debtors delay filing for bankruptcy, the more they tend to struggle. When they do finally file, the fresh start the process is able to provide for them is negatively impacted, as their finances and well-being are damaged.

During the period right before debtors file for bankruptcy, they may be experiencing a depletion of their assets and having to forgo basic necessities, such as food, in order to avoid filing. Many people may be struggling in this manner financially for years before finally taking action.

Individuals who are in the financial sweatbox are commonplace, according to the study. Using data obtained from the Consumer Bankruptcy Project, the report revealed that more than 66 percent of the individuals who were surveyed for the project were in the sweatbox for at least two years. Almost 33 percent waited at least five years before filing for bankruptcy. The number of debtors who waited at least five years is twice the number of people who reported doing the same in 2007.

A bankruptcy attorney may advise clients of what type of bankruptcy they may qualify for that will help them obtain financial relief. For clients with a steady stream of income, assistance may be provided with filing under Chapter 13, which involved a repayment plan that lasts for either three or five years.

Related Posts
  • What Happens to Your House in a Bankruptcy? Read More
  • Will Filing Bankruptcy Wipe Out All My Debts? Read More
  • Keeping Or Buying A Vehicle During Bankruptcy Read More