Bankruptcy can be stressful. Some experts even claim that the mental and emotional stress can be worse for those going through the process than the financial strain that they face.
Unfortunately, part of the reason for this is that people have some perceptions about bankruptcy that cause stress, but that are also false. In short, they’re creating a lot of this stress for themselves, when it could be easily avoided. Financial therapists often try to counter some of these misconceptions.
For instance, many people are concerned with what friends and family members will think about their bankruptcy filing. And it is true that some people may not approve. But the reality is that it does not matter what anyone else thinks when, legally and financially speaking, bankruptcy is the best move for the filer.
Another issue that people struggle with is assuming that their credit score will never recover from bankruptcy. While it isn’t good, a bankruptcy filing gets erased after a decade. Even while it’s on a person’s record, there are many things he or she can do to repair that credit score, such as using secured credit cards.
Finally, people often express fear that their debt load is too high and that they can’t use bankruptcy. That’s just not realistic. No matter how high debt climbs, there are always potential options. If you’re an individual using Chapter 7, don’t forget that even multi-billion dollar corporations have declared bankruptcy.
At the end of the day, the key is to make sure that you understand all of your options, looking into how they can be a positive financial force in your life, rather than something that creates more stress.
Source: US News, “Surviving the Emotional Toll of Bankruptcy,” Daniel Bortz, accessed March 30, 2018