The desire to pay bills and avoid potential embarrassment often make people in Kentucky delay a bankruptcy filing. Long-term research by the Consumer Bankruptcy Project shows that from 2013 to 2016, 66 percent of bankruptcy filers had suffered financial hardship for at least two years before seeking legal protection. Close to one-third of those surveyed had struggled for five or more years. Known as long strugglers, the numbers of these debtors have doubled since 2007.

Although they could have pursued a legal discharge of debts as soon as they fell behind on bills, long strugglers endured the stressful consequences of overwhelming debts. They took out new loans to pay old debts and sometimes went without medical care or food. Researchers call this situation the sweatbox. When people are in the sweatbox, their assets dwindle. People who file for bankruptcy right away have twice as many assets as long strugglers. About half of long strugglers must grapple with debt collection lawsuits while only 35 percent of other debtors are targeted by lawsuits.

The CEO of a nonprofit credit counseling agency recommends that people ask for help when their debts eat up over 40 percent of income. A bankruptcy might be especially helpful for people with unsecured consumer debts, like credit cards, personal loans and medical bills. A bankruptcy court could potentially discharge those types of debts and give a person a fresh start.

A person may wish to start the process by consulting an attorney. After reviewing the person’s income and debts, an attorney might determine if the person qualifies for a Chapter 7 bankruptcy. An attorney may be able to organize the person’s financial records and prepare the paperwork for the court. During this time, an attorney may inform creditors that they must deal with the court and cease contact with the person.