Bankruptcy often has the reputation of destroying financial health, but it can be the first step to freedom from creditors if it is used in the right way and at the right time. The decision can seem daunting and is always worth a lot of thought.
It is not worth it to be frozen in the process for very long, though, as a recent law review study shows. Most applicants for personal bankruptcy, especially using Chapter 13, may struggle the longer they wait and they may also lower their chances of receiving a bankruptcy judgment.
Chapter 13 restructures assets that an applicant wishes to keep, as opposed to the total liquidation with few exceptions included in Chapter 7. The time between the need to apply for bankruptcy and actually getting the filing approved, often called the financial "sweatbox," can drain vital resources.
People often continue to struggle with finances for longer after bankruptcy filings if they stay in the "sweatbox" for two years or longer. More than two-thirds of filers, and many of the people who are denied Chapter 13 bankruptcy, fall into that group of long sufferers.
It is advisable for people to get financial advice from professionals accustomed to working in bankruptcy as soon as financial conditions bring up the possibility. Although the time may not have come, it never pays to wait.
Consider the advantages of legal representation with bankruptcy, especially Chapter 13 filings. An attorney will be able to help with the specific reporting and procedures that make a filing more likely to succeed in bankruptcy court.