Surviving the Emotional Effects of Bankruptcy

No matter what circumstances ultimately led to filing bankruptcy, both the practical and the emotional impact on the debtor will be enormous. Confronting the emotional and psychological issues surrounding bankruptcy and reaching an understanding and acceptance of the situation are essential to rebuilding and maintaining a successful financial life. The experienced bankruptcy attorneys at Fred Walker in Austin, Texas, can guide a debtor through the complicated legal, financial, and emotional maze of bankruptcy and steer him or her in the right direction for the future.

Filing bankruptcy can, without a doubt, stir up many negative emotions. The debtor’s sense of self-worth is often closely tied to his or her financial circumstances. Loss of money can be experienced as a loss of identity, self-esteem, and confidence. We live in a society in which image is seemingly bought through possessions. Money can be viewed as a powerful currency not only in a purely economic sense, but also in relationships, and thus a real or perceived loss of interpersonal power can ensue when bankruptcy is filed.

Understanding these emotions can help disentangle the practical realities of money from the possibly destructive or limiting emotional response to bankruptcy. To come to terms and deal constructively with the situation, the debtor should work toward the following goals:

Deal with practical realities. As the debtor gets his or her finances under control, a greater general sense of control will follow.
Learn from experience. Take steps to ensure future financial security.
Learn new skills to protect financial well-being in uncertain economic times.
Learn to detach self-worth from material wealth.
Experience the feelings of loss, depression, anger, sadness, and shame, and in time be able to let go of those feelings and move on.
Release thoughts of resentment and blame.
Exercise self-compassion. Although for many filing bankruptcy feels like life is over, it can be a fresh start in many respects.

At times of significant loss, people tend to feel that their entire foundation has been shaken and that their most fundamental sense of security has been disrupted. They question their trust in themselves, in others, and in the world at large. Although it may be natural for many to bury these frightening emotions, bringing core insecurities to a conscious level can actually reduce fear and the feeling of being out-of-control, which enables individuals to start tackling their situations constructively. In addition, the counsel of a seasoned bankruptcy attorney at Fred Walker in Austin, Texas, can see a debtor through the tough times and guide him or her to a brighter financial future.