Recognizing the Emotional Side of Filing Bankruptcy

Financial hard times can hit anyone and cause emotional stress. It doesn’t matter your position on the economic ladder.  People who have a high income as well as those with lower incomes may need to turn to bankruptcy to help resolve their debt problems.   Researchers recently released results from studies analyzing the emotional toll high debt takes on people who struggle with financial stress. The studies found that some people’s false perceptions about bankruptcy in general and their own debt in particular may create misguided anxiety.  Some common forms of anxiety include:

  • Feelings of sadness, grief and shame
  • Concerns and worries about how family and friends will react to the situation
  • Feelings of despair from juggling finances for long periods.

Experts say that the problem is often more internal than external.  For some bankruptcy filers, they recommend counseling from a financial therapist who provides support during a financial crisis. Therapists in the emerging field of financial crisis counseling provide these important reminders:

  1. You are not alone – statistics show that while the US economy experienced an upward turn and bankruptcy filings in Middle District of Florida declined by 4 percent , still thousands of people file bankruptcy each month.
  2. Bankruptcy is not a permanent mark on your credit history. A bankruptcy may show up on credit reports up to 10 years after filing, but you can start rebuilding credit once the discharge is entered.
  3. Family may disapprove, but the financial fresh start of bankruptcy may offer the best solution to your financial woes.

For relief from personal debt, people usually file bankruptcy under Chapter 7 or Chapter 13.  Both chapters offer the debtor relief from collection activities immediately upon filing.  This protection –called the “automatic stay” – stops creditors from contacting you, repossessing or foreclosing on your property, garnishing your wages or initiating law suits concerning your debts.  Sometimes filing bankruptcy empowers people to take control of their debt which reduces their stress.

If you are struggling with high debt and need assistance consult with a qualified and experienced bankruptcy attorney to help you navigate your way out of debt.

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