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If you are facing the prospect of filing for personal or business bankruptcy, you’re probably experiencing all kinds of feelings and emotions, and most of them are probably negative. You may be feeling overwhelmed by the details of the filing, fearing what the long-term impacts will be either on your business, yourself or even your family, or dealing with a sense of failure. Understanding the psychology of bankruptcy and what it is meant to do for you can help alleviate the emotional stress you may be experiencing. Here are some important things to keep in mind.
Bankruptcy is a Beginning, Not an Ending. There are definitely ways that filing for bankruptcy represents an ending. Things have gotten bad enough that you can no longer handle it on your own. You need help. You need relief. But you can also thank your lucky stars that there is a clear, government-approved process to go through that will not just end the negative situation, but present you with the unprecedented opportunity to make a fresh start. Look at bankruptcy not as an ending, but the beginning of a new chapter of your life in which you are grateful for the opportunity of a second chance to do better. Your dreams of success, entrepreneurial progress, financial stability, and freedom are within sight again.
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You Are More Than The Poor Decisions You Have Made. Everyone makes mistakes. We all sometimes find ourselves in situations in which we are in “over our heads.” If you’re on the edge of filing for bankruptcy, some of the decisions you have made had to do with finances, whether you’re the victim of unfortunate circumstances or simply poor money management. The good news is that bankruptcy laws were created to help you overcome those bad decisions and prove to everyone that you can make better decisions. Think about all the areas in life where people get in over their heads without any government pathways for recovery. Putting that kind of positive spin on your situation can go a long way towards easing the stress you may be feeling.
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Owning Your Problems and Solving Them. By filing for bankruptcy, you are taking a very important step that says, “Yes, I am in over my head and I can’t solve this problem on my own.” What’s sad is how many people keep trying to deny the fact that they need help. These are the people who just keep shuffling the debt around, making a few payments here and there but never admitting that the debts are really insurmountable. The sooner you admit that you have a problem, the much better off you will be when you emerge from the other end of the filing. Studies show that only a fraction of people with serious debt problems file for bankruptcy protection. By taking that step, you’ve taken responsibility for resolving your situation and put yourself and your family back on the path to a prosperous future.
Yes, there is going to be certain amount of social stigma surrounding bankruptcy filings. And re-entering the credit markets will take some time. What you can control is how you frame your own bankruptcy filing. Understanding the key points above will help you put your bankruptcy filing in perspective, which should help you treat it for what it is – a chance for a fresh start.
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