Having a positive outlook on life can be helpful in many situations. However, that positive attitude is not always enough to address serious issues, like having too much debt. In fact, some consumers in Georgia who do their very best to pay off their insurmountable debts and avoid bankruptcy end up worse off than when they started. 

When making payments is not enough 

There were approximately 181,000 bankruptcy filings in the first five months of 2021 — 29% fewer than during the same time period of 2020. Fewer bankruptcy filings might initially seem like good news, but the reality may be much different. A recent study indicates that bankruptcies are probably dropping off at the expense of consumers. 

According to this study, people wait on average 22 months after receiving their first 90 day past due notice before filing for bankruptcy. That is nearly two years of additional financial suffering on top of whatever money struggles someone had to get into that position in the first place. This waiting also creates a phenomenon called shadow debt. Shadow debt typically does not show up on credit reports and includes: 

  • Bounced checks 
  • Unpaid rent 
  • Certain medical costs 

Waiting to get necessary financial help can create an extreme burden on someone who is already struggling. However, struggling in order to avoid bankruptcy is often counterproductive. For many people in Georgia, bankruptcy has time and time again provided an effective path toward financial security. Whether pursuing total discharge of debt with Chapter 7 or a payment plan with Chapter 13, can offer relief to people in all types of difficult situations.