The decision to file for bankruptcy is a serious one that people rightfully do not take lightly. While careful consideration is a good idea, procrastinating on filing for Chapter 7 bankruptcy can be a bad decision. There are a few reasons that Texas individuals who know they need to file should consider doing it sooner rather than later.
Experts often refer to the period before filing for personal bankruptcy as the "financial sweatbox." During this period, people's assets, such as their car, may depreciate while lenders may file lawsuits to collect. It is not unusual for individuals to face difficulty getting basic necessities during this period, like affording food and keeping a roof over their head.
People can stay in the "sweatbox" for years before filing for bankruptcy, often delaying the inevitable. Those who struggle for two years or more before filing end up with half the assets of early filers and a debt-to-income ratio over 40 percent higher than other debtors. Half of long-time strugglers will also face debt collection lawsuits, compared to 35 percent of other debtors.
There is a lot of stigma in Texas and throughout the U.S. around filing for bankruptcy. For some, however, the fresh start that comes with Chapter 7 bankruptcy is necessary, and putting it off can be worse both for them and their lenders. Those whose debt is over 40 percent of their income or who are forgoing essentials due to repayment should speak with a bankruptcy lawyer sooner rather than later to explore their options.