Gumm & Green, LLP, Attorneys at Law
Take Your First Step To A New Beginning
855-707-4233 | 805-577-7657

Delaying bankruptcy can make a bad financial situation even worse

Individuals in California and around the country who are struggling with significant debt often put off filing for bankruptcy because they are concerned about the possible consequences. However, a recent study suggests that this delay can often be far more financially damaging. Researchers from the Notre Dame University Law Review came to this conclusion after scrutinizing data from the Consumer Bankruptcy Project.

The researchers found that people with unmanageable financial situations often endure stress and daily harassment from debt collectors for years before seeking relief. More than two-thirds of the bankruptcy filers that were surveyed waited for two or more years before filing a Chapter 7 or Chapter 13 petition. Almost a third delayed taking action for five years or longer. However, bankruptcy documents reveal that their situations became progressively worse as they waited. Many only pursued debt relief when the pressure on them to make restitution became unbearable, and they had no assets left to sell.

This is why the individuals were referred to in the law review study as long sufferers. They had less than half the assets of consumers who took steps to address their debt issues promptly. The long sufferers also had debt-to-income ratios that were 40 percent higher than those who acted swiftly, and they were far more likely to be dealing with lawsuits filed by creditors and debt collectors.

Attorneys with experience in this area will have likely encountered many long sufferers. Many individuals delay pursuing debt relief because they are worried about the social stigma of bankruptcy, or they have been misinformed about the steps that are involved. Lawyers could dispel myths about bankruptcy asset seizures and irreparably damaged credit, and they may also point out that filing a Chapter 7 or Chapter 13 petition generates an automatic stay that puts a halt to litigation and prevents any further harassing phone calls from bill collectors.

No Comments

Leave a comment
Comment Information

Get Support Today

Bold labels are required.

Contact Information
disclaimer.

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

close

Privacy Policy

Email Us For A Response

Office Location
5743 Corsa Avenue, Suite 111
Westlake Village, CA 91362-6440

Toll Free: 855-707-4233
Phone: 818-707-4233
Phone: 805-577-7657
Fax: 818-707-4262
Map & Directions

Local Numbers