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Don’t overlook the emotional struggles experienced in bankruptcy

Big changes in life are almost always accompanied by feelings of fear, stress, uncertainty and self-doubt. Bankruptcy is no exception. Whether you are considering filing for personal bankruptcy or business bankruptcy, there will likely be strong feelings that need to be acknowledged and addressed.

This was the wisdom shared in a recent Forbes article, and it is good advice. The article’s author, Joe Apfellbaum, notes that there is an emotional cost to bankruptcy just as there are financial costs.

If you are a small business owner and are filing business bankruptcy, you may be struggling with the idea that something you worked so hard to build is now in jeopardy. You may be worried about laying off some of your employees and otherwise making difficult changes. Instead of suppressing these feelings and trying to focus just on the work at hand, you may need to talk them out with trusted friends, family members and perhaps mental health professionals.

Similarly, many individuals filing for personal bankruptcy (Chapter 7 or Chapter 13) find themselves facing feelings of failure and embarrassment. This is largely because of the misconception that bankruptcy is something to be ashamed of. It’s not. As we have written in recent weeks, many Americans get into financial trouble for reasons beyond their control.

In order to come to terms with either personal or business bankruptcy, Apfellbaum says, it is important to realize an often overlooked fact. Depending on your situation, filing for bankruptcy may be the best way to address your overwhelming debts. In some cases, it may be the only reasonable way. Thinking in these terms can help you realize that compared to other debt-relief strategies, bankruptcy is probably the smartest and most effective option.

To be sure, no one has the right to dictate how you feel about your own situation. Filing for bankruptcy can be an emotionally difficult experience. But as long as you are willing to address that reality and attempt to work through it, your mental/emotional health can be restored along with your financial health.

Source: Forbes, “4 Tips For Coping With The Emotional Cost Of Bankruptcy,” Joe Apfellbaum, Aug. 21, 2014

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