Debtors in Kentucky and throughout the country may be doing themselves a disservice by waiting to file for bankruptcy. By waiting, they could deplete assets or otherwise negate some or all of the financial benefit gained by filing. In many cases, individuals who choose to file only do so when they are at the point when they face debt collection calls or creditor lawsuits. The time that people spend putting off asking for protection from creditors is called the sweatbox.

According to a survey from Notre Dame Law Review, 66 percent of cases analyzed involved those deemed to be long strugglers. This means that a person spent two years or longer in the sweatbox. Furthermore, roughly 33 percent took five years before seeking bankruptcy protection. Those who chose to wait before filing for bankruptcy generally had higher debt-to-income ratios than others with debt.

Furthermore, they were more likely than other people with debt to face collection lawsuits. In many cases, people decide against bankruptcy because there is a stigma about making use of that tool. Those who are struggling with their debt are urged to speak with a credit counselor about ways to ease their burden. Bankruptcy may be appropriate for those who have a debt-to-income ratio of higher than 40 percent.

Filing for Chapter 13 bankruptcy may have many benefits for a debtor. For instance, it may be possible to retain ownership of a house or negotiate new home loan terms. Unsecured debts may be paid off in part or in full during the three- or five-year repayment period. If a balance remains on an unsecured debt when the payment period ends, that debt may be discharged. Debtors could also receive a stay against creditor contact or collection activities such as a lawsuit.