Tips for Dealing with the Emotional Effects of Bankruptcy
Filing for bankruptcy is a huge decision, but can it make you feel depressed?
It’s no secret that dealing with financial difficulties can be a nightmare. Whether you’re thinking about filing for bankruptcy or you already have, it’s normal to have some questions. One of the biggest questions adults considering bankruptcy often have is how filing will make them feel emotionally. Our firm has been helping individuals and families for over three decades navigate the legal aspects of bankruptcy. We understand that filing for bankruptcy is more than just a financial issue. There are emotions and interpersonal issues surrounding bankruptcy. We have some important tips for dealing with the emotional aspects of filing for bankruptcy, and whether it’s right for you.
Who should consider bankruptcy?
Filing for bankruptcy is a huge decision that can have a powerful impact on your life. There are pros and cons to filing for bankruptcy; however, you may want to consider filing if you cannot pay your debts and you constantly feel like you are drowning in bills. If even making minimum payments just isn’t happening, you may need to consider the possibility that filing for bankruptcy can give you a fresh start. Living in debt can play a large role in emotional and mental health and breaking out of your debt is one way you can start moving forward with your life.
What are the benefits of bankruptcy?
Perhaps the biggest benefit of bankruptcy is that it enables you to start fresh. Understand that there are cons to bankruptcy. For example, it will remain on your credit report for seven years and can play a role in your ability to acquire loans or credit cards; however, it will also free you from the burden of unbearable medical or credit card debt you may be dealing with on a daily basis.
There are many misconceptions surrounding the amount of time it takes to rebuild credit after bankruptcy. According to a recent study by LendingTree, more than 40 percent of consumers end up having a credit score of 640 one year after filing for bankruptcy. Approximately 65 percent of filers see the same score, at least, three years after the bankruptcy case is over.
Most Americans have some debt; however, once your debt becomes unmanageable or extreme, you may want to consider bankruptcy. There are different types of bankruptcy, so the type you declare will depend on whether you have assets, as well as the amount of debt you have. An attorney can best advise you as to whether you are a good candidate for bankruptcy, as well as which type of bankruptcy you should consider.
How will bankruptcy make me feel?
Both bankruptcy and living with debt can cause emotional stress to individuals. It is important to speak with a bankruptcy attorney who can provide you with calm and rational advice and explain to you the pros and cons for your specific financial situation. The financial effects of bankruptcy are only temporary, but the emotional stress of debt on your everyday life can strain your relationships and the mental burden can be overwhelming. Many people who turn to bankruptcy have been carrying the emotional weight of their debt for way too long and are relieved when they step foot in our office.
If you’ve been thinking about declaring bankruptcy, it’s important to talk with an attorney who can help you. A bankruptcy lawyer will evaluate your financial situation and talk with you about your options moving forward.