Bankruptcy is often discussed in hushed tones or with a sense of dread — because a lot of people see it as a sign of failure. It’s not. Bankruptcy can happen to anybody — even the wealthy and famous. The anxiety many people feel surrounding bankruptcy is really unfounded, but how do you put that aside?
Here are some tips that can help:
Recognize that bankruptcy is a proactive step
Bankruptcy is a process that helps people relieve their overwhelming debts — and it’s actually a responsible way of handling a financial crisis. It can help to reframe the idea of bankruptcy into a positive, proactive action, instead of seeing it as a sign of failure.
Acknowledge your emotions
It’s okay to recognize that it is uncomfortable to be insolvent — and that feelings of shame or anxiety are normal. However, you don’t want to let them define you. It can help to discuss your feelings with a trusted friend or a therapist.
Focus on what you can control
However you ended up in bankruptcy, you cannot change the past — so focus on your future. Concentrate on understanding the differences between Chapter 7 and Chapter 13 bankruptcy as you decide which path is right for you. Create a new budget, look for ways to increase your financial stability and think about how your situation will improve once you file.
Maintain a balanced financial budget
By managing a balanced financial budget after a bankruptcy filing, debtors can regain a sense of control in their lives and limit the fear of future bankruptcy filings. Start a savings plan as soon as possible and be aggressive about putting money away for emergencies.
Remember that this is not the end
One of the fears many debtors have after filing for bankruptcy is that they can never make large investments again, especially since their credit score has been negatively affected by the process. That is often not true. Debtors can rebuild their credit score by making safe financial investments and opening secure loans and credit cards. In time, debtors can raise their credit score again and regain control of their future.
It can take time to overcome the fear of bankruptcy. Legal guidance can help people take the first step when filing for bankruptcy.