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Putting off debt relief? You might be making things worse

The bills show up in the mailbox every day and collectors call nonstop, but still some people delay filing for bankruptcy. Although Florida debtors might put off seeking debt relief for different reasons, the outcomes are sadly similar -- even higher amounts of debt as individuals face rising asset depletion. In many instances, delaying bankruptcy usually has far more negative impacts than filing usually does.

A recent study using data from the Consumer Bankruptcy Project showed that people's financial situations worsen the longer they delay filing for bankruptcy. So-called long strugglers -- those who put it off for at least two years -- usually have about half the amount of assets when compared to other people filing for bankruptcy who did not wait. These long strugglers also have a debt-to-income ration that is 40 percent higher on average when compared with other debtors.

However, the effect is not limited to finances. The emotional toll of putting off bankruptcy can be monumental. Approximately half of all long strugglers are hit with lawsuits for debt collection, which can be an emotionally jarring process. Only 35 percent of those who file for bankruptcy early on in their financial struggles are sued for debt collection.

The stigma of bankruptcy prevents many people in Florida from making the best decision for their financial futures. Unfortunately, the financial and emotional toll of delaying debt relief is far greater than any perceived societal stigma. Those who are faced with out-of-control debts are usually well-advised to consider the long-term benefits of bankruptcy rather than focusing on the potential stigma they might feel.

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Paul Urich
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