Kentucky residents who are struggling to cope with unmanageable financial situations sometimes put off pursuing their debt relief options due to the stigma surrounding personal bankruptcy. Experts have found that individuals often deal with crushing debts and daily harassment from bill collectors for months or even years before considering a bankruptcy filing. In many cases, a traumatic event such as an unexpected bill, wage garnish or lawsuit prompts them to finally take action.

The desire to avoid bankruptcy and handle financial problems without assistance can sometimes lead individuals to make unwise decisions like using their retirement savings to temporarily make ends meet. This is a mistake because these funds will generally be protected during a bankruptcy. Furthermore withdrawing them early can leave individuals financially vulnerable in their retirement years. Withdrawing money from IRA or 401(k) accounts before reaching retirement age can also lead to fees, penalties and tax bills.

Individuals who are able to overcome their reservations about debt relief can file for Chapter 7 bankruptcy if they qualify. Those who earn too much for Chapter 7 or have assets like automobiles or real estate to protect may opt to file a Chapter 13 bankruptcy instead. Either type of filing will prompt an automatic stay that puts an immediate end to harassment from creditors and debt collectors. The automatic stay also prevents assets from being seized and stops wage garnishes.

Attorneys with experience in debt relief cases have likely encountered clients who were extremely reluctant to file for bankruptcy. However, some of the most successful people in the nation’s history had more than their fair share of financial troubles. In fact, the bankruptcy laws were written to provide second chances to debtors.