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Why waiting to file bankruptcy can be costly

Many people often struggle with debt for many years and never consider bankruptcy due to a belief there is a stigma of being a failure related to it. Often though, the real failure is struggling with financial problems for a long period of time without ever considering the option of bankruptcy.

If you are one of the people who has been putting off filing for bankruptcy and believing that things will change for the better instead of staying the same, you may be interested in a recent report citing others who are in the same situation as you.

The researchers looked at people who were in a pre-bankruptcy period often referred to as the sweatbox. Generally, the report shows that the longer people remain in the sweatbox and delay a bankruptcy filing, the more dire their financial situation becomes. One example shows that those who were longtime strugglers of debt have only half the median assets of others who are in debt and their debt-to-income ratio is over 40 percent higher than others in debt.

Why waiting to file bankruptcy can be worse than holding the course

The term sweatbox is very telling. When in financial trouble, collection calls, minimum payments and having enough money to live for the month can be a daily stress. When someone lives like this for many years on end, they are not only keeping their lives from moving forward, but they can essentially be delaying a financial rebound that bankruptcy can provide. By prolonging the depletion of your assets while in the sweatbox, by the time you are ready for the fresh start after bankruptcy you may have a harder time than you should finding your financial footing.

Are you ready to file for bankruptcy?

If you find yourself facing any of the factors below, it may be time to consider getting out of the sweatbox and finding out if bankruptcy is right for you.

  • Your debt is more than 40 percent of your income
  • You are using credit cards or loans to pay off other debt
  • You are sacrificing essential items to make debt payments
  • You have debt that can be wiped out through bankruptcy

If you have not yet considered the possibility of bankruptcy, it may be worth your while. Especially if any of the situations above are familiar to you. The fresh start you can get from bankruptcy may have you on a secure financial path much faster than continuously trying to navigate your way out of the sweatbox.

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Sigmon & Henderson, PLLC
518 S New Hope Road
Gastonia, NC 28054

Phone: 704-269-6374
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