Money and debt can be financially charged issues. Yes, as long as there is enough income and all the bills are paid, emotions are usually positive; but once an imbalance occurs (loss of a job, reduced income etc.) negative emotions can become highly charged.  Unfortunately, many debtors allow their emotions to dictate whether or not they will file bankruptcy.  That is a huge mistake.

Here are three emotional reactions to bankruptcy you might experience and three good reasons why you should ignore them:


Many debtors who are considering bankruptcy often delay action because they are embarrassed by their situation.  They mistakenly believe that a bankruptcy filing is a sign that they are a failure financially and in their life in general. That couldn’t be farther from the truth.  When a debtor files bankruptcy it is a sign that they are an intelligent individual who knows when to “say when.”  We are only human, all of us.  And an important part of being human is knowing when you need to cut your losses and get a fresh start.  Even billionaires like Donald Trump and automaker giants like GM understand that, that’s why they filed bankruptcy.  Does Trump look embarrassed? Hardly.


Many debtors are afraid that something horrible will happened during their bankruptcy and things will be much worse than they are now.  This fear is mostly fiction and it’s really not about things getting worse, it is the fear of the unknown. Every debtor who files bankruptcy feels a little fear because it is an unknown territory. But becoming educated about the bankruptcy process will help allay those fears so that you can get through the bankruptcy process and on your way to a fresh financial start.


Anger usually disguises itself as stubbornness. Many debtors, facing the prospect of not being able to pay their bills, refuse to file bankruptcy and instead dig in their heels. They do everything they can to pay bills such as taking out more loans, liquidating their retirement accounts and selling assets well below value in an attempt to avoid bankruptcy. This type of reaction doesn’t improve their situation it only worsens it because they are destroying assets that could be saved if they just filed bankruptcy to get a fresh start.  A warning: Liquidating your assets to pay bills may be a huge financial mistake especially if you are liquidating a retirement account. Your retirement is your financial safety net in the future and creditors can’t touch it. Why should you give them easy access?