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Why waiting for Chapter 7 can be financially damaging

Bankruptcy does not have the best reputation in the public consciousness. Here in Kentucky and elsewhere in the nation, individuals in debt are often under the mistaken impression that a Chapter 7 filing is something to be avoided even in cases of extreme debt. Many experts disagree. In fact, they suggest that the longer an individual in debt crisis waits to file for bankruptcy, the longer lasting the financial damage can be. 

The period of time prior to a bankruptcy filing is often referred to as the "sweatbox" period. During this time, a debtor could be facing harassment by collections agencies and, in some cases, even lawsuits. Often, people will forgo necessities like food during these periods, all in an effort to stave off bankruptcy. The truth is all they are really doing is depleting assets that could be used to help them out of this financial quandary. 

The longer individuals struggle, the fewer assets they have to help sustain them post-bankruptcy. Experts say the stigma of bankruptcy gives people pause, but one expert suggests that at the core of a bankruptcy filing is the American ideal of the second chance -- the ability for someone struggling against insurmountable debt to wipe the slate clean and start over. Approaching bankruptcy in this light can be helpful for those who remain resistant. 

Chapter 7 bankruptcy is a powerful tool in the arsenal of legal and financial professionals. Filing for bankruptcy allows certain debts held by Kentucky residents, including credit debt, medical debt and other unsecured forms of debt, to be discharged by the court. This can help those facing even the heaviest debt load get back on financial track. 

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Law Office of Ginger C. Cord, PSC
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Lexington, KY 40507

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