Menu Location
${site.data.firmName}${SEMFirmNameAlt}
schedule a consultation
  • 866-665-8095 toll free
  • -or-
  • 734-418-0365local

Financial situations often get worse as debtors delay bankruptcy

The time period during which a person is struggling with asset depletion and avoiding a bankruptcy filing is sometimes referred to as the sweatbox. It's an unpleasant situation for Michigan residents who have to deal with collection calls and making decisions regarding the finances of basic life necessities. A report called "Life in the Sweatbox," which was recently published in the Notre Dame Law Review, focused on the impacts of delaying filing for bankruptcy.

Generally, the longer people remain in the sweatbox, the worse their financial situations grow. The report defines people who remain in the pre-bankruptcy stage for two years or more as long strugglers. According to the study, long strugglers had half the median asset value of debtors who filed sooner. Approximately half of long strugglers were faced with debt collections lawsuits, compared with 35 percent of other debtors. Long strugglers had a median debt-to-income ratio more than 40 percent higher than debtors who filed sooner.

Some analysts believe people avoid filing for bankruptcy due to having a dedication to paying back debts as well as a stigma against filing. Bankruptcy laws are designed to give a fresh start to the honest but unfortunate debtor. One problem of the sweatbox, however, is that it often depletes a debtor's funds so much that they don't really get to start fresh.

People in Michigan who are struggling to pay down debts may want to consult an attorney. A lawyer with experience in bankruptcy law may be able to suggest debt reduction or elimination options to fit the client's specific circumstances. In addition, an attorney may be able to draft and file a petition for bankruptcy to discharge the client's debts.

No Comments

Leave a comment
Comment Information
brand footer

Jackson Office
209 E. Washington
Suite 258
Jackson, MI 49201

Toll Free: 866-665-8095
Phone: 734-418-0365
Fax: 734-663-9973
Map & Directions

Ann Arbor Office
6553 Jackson Road
Ann Arbor, MI 48103

Toll Free: 866-665-8095
Phone: 734-418-0365
Map & Directions

credit cards

back to top