Bankruptcy and Mental Health

Learn how financial hardship impacts mental health and discover expert tips

The Emotional and Psychological Side of Bankruptcy: How to Cope
Guilt. Anxiety. Shame. Sometimes, these are not just mere words describing undesirable feelings. They can feel like a burden, particularly during chaotic moments in our lives, like bankruptcy.
From the social stigma to the tedious legal processes, bankruptcy can take a toll on your emotional and psychological well-being. But like any other trouble, there's always a silver lining. Here are some ways to cope in financially distressing moments like bankruptcy.
What is Bankruptcy?
While it is true that bankruptcy can negatively impact your emotional and mental health, its real intention and purpose are not meant to make you feel that way. Bankruptcy is the legal process aimed at providing relief and remedies for individuals, organizations, or businesses from overwhelming debts.
This is also why some debtors work with lawyers when declaring bankruptcy due to the many legal implications it entails. If you're looking for a bankruptcy attorney, I can recommend Kevin S. Neiman (Colorado), Gregory Wald (Minnesota), Luke Homen (Oklahoma), and Jeffrey B. Kelly (Georgia).
Bottom line is, filing for bankruptcy gives debtors the opportunity to discharge their outstanding loans and ultimately start fresh.
How Bankruptcy Affects Your Emotional Health
         Hopelessness.          It cannot be denied that when in bankruptcy, we often find ourselves          in a hopeless situation. We felt like we were losing total control          of our finances and, to some extent, desperate.          
         Shame          & Guilt. Because of its association with financial loss and          failure, declaring bankruptcy can also result in feelings of shame          and guilt. In some cases, we hesitate to share and ask for help          during these tough times if it means not having to deal with these          emotions.          
         A          feeling of Being Shunned. Despite today's modern times, bankruptcy          still carries a social stigma, which could explain why we resort to          isolating ourselves from the rest of the world.          
         Lower          Self-Esteem. Our financial status is often tied to self-esteem.          Others even take pride in managing and growing their wealth. On the          other hand, when we encounter financial disasters like bankruptcy,          it can significantly lower our self-esteem.
         Strain          in Relationships. Financial difficulties can also adversely impact          relationships with the people we love and care about, be it our          family or friends.          
Coping with the emotional impact of bankruptcy
It is always important to remember that, like other issues in our lives, we can cope with the emotional impact of bankruptcy.
         Acceptance.          The most effective and straightforward way of dealing with the          rollercoaster of emotions when in bankruptcy is to accept them and          not fight them.          
         Seek          professional help. Asking for professional help from therapists or          psychologists can also be an effective way of managing your emotions          when in bankruptcy. Especially when the effects start to disrupt          your daily life, intervention may be needed.          
         Join          support groups. It is comforting to find solace and empathy from the          same people with the same experiences as you. Getting the assurance          and knowing you're not alone can greatly help your mood and          outlook.          
         Always          remember the lessons. You can view your bankruptcy as a life lesson.          Think about your choices, actions, and feelings, and this reflection          can help you become better and stronger when you recover.          
Indeed, bankruptcy can feel like it's the end of everything - your life, your dreams, your goals. Aside from the financial aspect, its emotional impact can also be overwhelming unless you learn and manage it effectively.