One of your tactics for dealing with difficult situations in life may relate to just sticking it out. After all, no bad time lasts forever, right? While this type of approach may work in some cases, it may benefit you more to take proactive measures to address certain predicaments, especially when it comes to your finances.
When many people first accumulate debt balances, they often believe that they can keep their credit use under control and pay off the balances as needed. Of course, a number of circumstances could upend this type of plan, and a substantial amount of debt could accrue in a relatively short period of time. Still, you may think that trying to handle the financial issues on your own over time would be better than filing for bankruptcy.
More time passes, more issues arise
One reason that you may put off filing for bankruptcy could relate to the potential damage the process could cause to your credit. However, waiting to file can also result in damage to your credit and overall livelihood. Nonetheless, a study conducted by the Notre Dame Law Review indicated that 66 percent of individuals who participated in the study were "long strugglers," or people who had been putting off bankruptcy for two or more years.
Unfortunately, long strugglers face more hardships than individuals who chose to file for bankruptcy sooner. The study showed that long strugglers had far fewer assets and higher debt-to-income ratios than consumers who did not wait as long to commit to bankruptcy. Additionally, 50 percent of long strugglers had collection lawsuits filed against them.
Sticking it out may not work
You may not yet consider yourself a long struggler, but the time may still have come to relinquish your "stick it out" mentality. If any of the following scenarios apply to your situation, you may want to gain more information on bankruptcy:
- You use credit cards or other loans to pay already existing debt.
- You choose not to spend money on food, medical attention or other essentials in hopes of preventing further financial difficulties.
- You have debts that bankruptcy could reduce or eliminate, like credit card debt or outstanding medical bills.
- Your level of debt has surpassed 40 percent of your income.
If you feel the time has come to take serious action to address your outstanding debt, you may want to enlist the help of a New Jersey attorney to better understand this debt relief option.