Are You Psychologically Prepared for Bankruptcy?

October 14, 2011 by  Filed under: Bankruptcy 

The majority of bankruptcy cases are brought about due to unexpected financial disasters like sky-high medical bills, job loss and divorce (as opposed to the unfair yet popular image of poor credit card use), yet many people who file for unprepared for the psychological consequences of filing for a Chapter 7 or Chapter 11 bankruptcy.

While filing for bankruptcy certainly gives your finances a fresh new start, it’s important to prepare yourself for the psychological journey you’ll take even before you contact a bankruptcy lawyer. Declaring bankruptcy is no walk in the park; however, with the assistance of this article, you should be psychologically prepared.

· First, it’s important to realize that you’re not a failure for filing for bankruptcy, nor will you be a failure all your life for doing so. Filing for bankruptcy isn’t a sign that you’re doomed – rather, it’s a very helpful legal option for consumers who’ve been given the short end of the financial stick. Additionally, filing for bankruptcy is a rather common experience; according to the Wall Street Journal, over 1.4 million people filed for bankruptcy in 2009 alone, with those numbers continuing to rise.

· Before you prepare to file for bankruptcy, you must get yourself mentally ready for a few rocky years. Although declaring bankruptcy will give you the fresh financial beginning that you need to start your credit history all over again, there’s no denying that you’ll be facing higher interest rates, higher insurance premiums and higher security deposits for a little while. However, think of the alternative: if you’re considering filing for bankruptcy, then it’s highly likely that your credit is already taken a hit. Struggling with your debts and being a pauper for the rest of your life just isn’t an option.

· You must also be prepared to take a good look at what landed you in this financial boat in the first place. Yes, you may have been slapped with unexpected financial disasters – but was there anything that you did that contributed to the mess you’re in? For example, do you tend to ignore your savings? Do you often max out your credit card? Are you sloppy with your retirement fund? Taking a good hard look at the money mismanagement behaviors that got you here in the first place will help you avoid declaring bankruptcy again in the future.

Psychologically preparing yourself for bankruptcy is just as important as finding an expert bankruptcy lawyer to assist you with your case. Above all things, don’t beat yourself up for filing for bankruptcy – if it’s what you need to do to repair your finances, then you shouldn’t feel badly about doing it.

Reed Allmand, sponsoring attorney for, is constantly looking for ways to provide the best financial information for his clients. Whether you are considering filing for bankruptcy, or are currently going through a Chapter 7 or Chapter 13, visit for up to date news and information you need to know.

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