It is a common misconception that filing for bankruptcy represents some kind of personal shortcoming on the part of the individual or the family, but many experts would argue that it can be a valuable tool in debt reduction. In Connecticut and across the country, a Chapter 7 bankruptcy filing can actually help get someone out of debt faster and more effectively than attempting to slowly dig out of a financial sinkhole. However, waiting on a necessary filing can cause more harm than good.
The period prior to a bankruptcy filing is often known as the “sweatbox,” wherein a debtor will drain his or her finances even further in an attempt to stave off bankruptcy. This can result in depletion of key assets, as well as the stress of debt collection and even lawsuits. In extreme cases, some people even elect to go without food and other necessities to avoid filing.
This “sweatbox” period can last for years before the debt is appropriately assessed. Much of this can be attributed to the negative connotation many people have about debt consolidation and bankruptcy. The truth is that bankruptcy can be a valuable stepping stone toward financial security.
Chapter 7 bankruptcy represents a fresh start. In some cases, bankruptcy courts in Connecticut will discharge credit card debts, medical bills and even student debt in special circumstances. This can “wipe the slate clean” and allow even the most in-debt filer a chance to return to financial stability while mitigating the stress heavy debt can engender.