Surviving the Emotional Side of Bankruptcy


Emotion (Photo credit: rexquisite)

The decision to file for either a business or personal bankruptcy is difficult enough.  While you may have prepared yourself for the short-term and long-term financial consequences for the decision, most likely the emotional consequences have yet to be addressed.  Each person is different and for some the emotional reactions are less than others but for the most part, each walks through the different stages although not necessarily in any particular order.  By being aware of the emotional stages to the bankruptcy and learning to cope effectively you can begin to heal from the storm of bankruptcy.

Shock – Is this really happening?  This is the most immediate reaction to the reality of filing for bankruptcy and usually lasts for a couple of weeks.  It is similar to a deer caught in the headlights of an oncoming car; you feel paralyzed, overwhelmed, and insecure about the decision you made.  Worse, some your past decisions are what contributed to this moment so you are reluctant to trust even yourself to make the simplest of decisions in the moment.  Shock fades as the reality of your situation sets in and some minor decisions are able to be made.

Guilt – What have I done?  Recalling past mistakes over and over for the point of learning from them is useful but when the recalling turns into beating yourself up, it becomes destructive.  Feelings of guilt over poor decisions in the past seem to flood your thinking and can be too much to handle at times.   Being aware of your mistakes and learning from them is different from agonizing over them.  What is done is already done, now is not the time to beat yourself up over the past, rather begin to look forward to the new possibilities.

Shame – What will others think?  Friends, family, co-workers, and neighbors might be able to find out about your bankruptcy.  However, you are under no obligation to tell anyone about your bankruptcy unless it is asked for on an application to a job, rental agreement, loan or other legal binding document.  Everyone does not need to know about your financial situation; this includes friends, relatives, co-workers, and neighbors and talking about it to everyone is not necessarily helpful.  Your financial situation is your private business and should only be disclosed if required or agreed upon with your spouse.  Instead find a confidant, a counselor, a long-term friend, or your spouse to discuss and vent your feelings of frustration, but try to keep the discussion to just one or two persons.

Anxiety – What will I do now?  The pounding in your chest, difficulty breathing, racing heart rate, stomach indigestion, nausea, sweaty palms, dizzy feeling, chills or hot flashes are indications of intense anxiety.  Anytime you feel out of control, overcome by fear of things that you were never afraid of before, or as if things are happening to someone else and not you, it is likely that you are experiencing anxiety.  Just identifying anxiety as anxiety sometimes reduces the intensity while understanding that the root of the anxiety is the bankruptcy and not you losing your mind.

Anger – Whose fault is this?  There is a tendency to blame others for the bankruptcy and in some cases this is entirely true.  Economic factors such as loss of a job due to reorganization, loss of business, or decreased value in a home are for the most part outside of your control.  Taking anger out on the economy, politicians, or your dog will not improve your condition, it will only make it worse because it distracts you from the things you can control.  The same is true for blaming your spouse for the bankruptcy; all that accomplishes is to add to the increased tension in a marriage and could result in permanent separation.

Depression – Why does everything seem so hard?  At some point all the other emotions seem to fade and you are overcome by an intense sadness that may result in a desire to be alone, crying over unexpected events, disinterest in things you previously enjoyed, moodiness, loss of energy, insomnia, indecisiveness, decreased sex drive, or sudden weight gain/loss.  Situational depression under these circumstances is normal.  There are times in our life when we will naturally have great peaks of excitement such as falling in love or the birth of a child followed by great valleys of sadness such as losing a loved one or as in this case filing for bankruptcy.  Understanding the cause of your depression is half of the battle, not allowing it to take over your life is the other half.

The emotions you may experience after filing for bankruptcy may catch you off guard and can vary in intensity over a period of one to two years.  In many ways, filing for bankruptcy is similar to a death because recovery from bankruptcy requires a commitment to die to past spending mistakes and expectations for the future.  Look for the article titled, “Now What: Recovering from the Negative Emotions of Bankruptcy”.

For more information, watch this YouTube video: 

Repairing, restoring, and rebuilding relationships takes time, energy and effort.  If you find yourself needing more help during this process, please call our offices at 407-647-7005 to schedule an appointment.  Or you can send me a quick email at

Now What: Recovering from the Negative Emotions of Bankruptcy

Filing for business or personal bankruptcy is one of the more difficult decisions you will make.  Combine this decision with the unexpected negative emotions and at times things can seem to be overwhelming.  See the article titled, “Surviving the Emotional Side of Bankruptcy” to help identify some of the negative emotions that are often experienced.  Once you identify the negative emotions the next step is to cope and then finally to overcome the negative energy and look for what you can do.

Regain control.  There are many factors that are completely out of your control during bankruptcy but there are some factors that are within your control.  The economy, the value of your home and in some cases the prospect of a job in your area of expertise is beyond your ability to change.  However, your spending habits, budgeting, taking care of yourself physically, and increasing your income potential are within your control.  Place your energy into evaluating your current situation and begin to look for even the smallest of changes that you can make.  Making many small changes can help to change your overall situation.  For instance, you may begin clipping coupons, shopping at discount stores, garage sales or thrift stores for your needs instead of going to your usual stores.  In addition, taking care of your health, eating right and exercise can help to reduce future medical costs.  Look for the small things that you can change instead of the large things you cannot change.

Focus on the positive.  It is easy to become focused on all of the negative things happening in your life right now as filing for bankruptcy makes them all too clear.  The temptation is to allow the negative emotions to overtake you and focus on them instead of the positive.  Bankruptcy has a way of taking a half-empty glass and making it three-quarters-empty (or more), yet there is still something left in the glass.  However small the amount, give thanks for what you still have.  Your possessions may no longer be in monetary form but they may be in relational form such as good friends and family or in physical form such as good health or spiritual form such as a strong faith in God.  Whatever you have left, be grateful and give thanks daily.

Learn from past mistakes.  The challenge of learning from past mistakes is to stop beating yourself up and stop dwelling on the same issue over and over.  Replaying the moments of poor decisions again and again like a tape running in your head is not productive rather it is destructive.  What is worse is labeling yourself as a loser or a failure for having made the mistake in the first place.  A better solution is to write down the mistakes, evaluating each one separately to see if you really could have made a better decision.  For instance, if you found yourself in an overvalued house before the crash of the real estate market, how much could you realistically have foreseen?  Even the financial experts did not predict such a crash and certainly the mortgage industry was off as well.  But you can learn from this event that what goes up can come down and buying a home well under your current income level is better than buying a home at your current income level or slightly above.

Make a new plan.  Only after you have confronted the negative emotions, regained control over what you can control, focused on the positive things you still have and learned from your past mistakes can you begin to make a new plan.  Trying to make a new plan without the above information will not provide you with the proper perspective.  Making a new plan is about looking forward to what is a more realistic expectation for your financial and personal life.  You may choose to go back to school to advance your degree or work towards a vocation that you enjoy.  You may choose not to buy a home until you can put 50% of the money down, choosing to save for the event.  You may choose not to purchase any new or used cars on a payment plan and instead save the money out of cash flow.  Whatever the plan, write it down and refer to it regularly to keep your perspective in the proper place.

Use the negative emotions from bankruptcy to form a new way of looking at life.  The American Dream does not have to include massive amounts of debt rather the American Dream is about freedom from the tyranny of debt.  By choosing to live your life differently, you will begin to see the lessons learned from bankruptcy as a blessing instead of a curse.

For more information, watch this video. 

Repairing, restoring, and rebuilding relationships takes time, energy and effort.  If you find yourself needing more help during this process, please call our offices at 407-647-7005 to schedule an appointment.  Or you can send me a quick email at

How to Destroy a Marriage: Get into Debt

It seems that our culture encourages the concept that after you say “I do” at your wedding, you also say “I do” to a house payment, car payments, new furniture, nice honeymoon, and each other’s debt.  Here is new thought, the ball and chain in your marriage is not each other, but rather the debt you both carry around.  Think about it.  The debt becomes like an additional partner in your marriage as you can no longer separate without bringing the debt with you no matter who in the marriage contributed to the debt.  The debt controls what you can and cannot do, where you can and cannot go, and how you can and cannot spend.  The debt becomes part of your every conversation, the cause of great anxiety and increases your stress as each of you takes a stand against the other in the blame game.  That is why there is no quicker way to destroy your marriage than to go into debt.

How did we get here?  In the movie, “The Company Men” there is a scene in which Ben Affleck depicts the façade that everything is fine by going to play golf in his expensive car after he has lost his job and is on the verge of losing his house and his marriage.  He falsely believed that appearance was everything and all he had to do was do what he always had done and everything would be fine.  He was wrong.  Debt traps you into the belief that you will never lose your job, that you will always be in perfect health, and that the economy will work in your favor.  This is not true, it is a lie.  There are no guarantees for the future and tying the hopes of your marriage and future into being able to pay off your debt is dangerous.

Who are you trying to please?  Is it your spouse?  Is it you?  Is it your neighbor?  Or are you already trapped into trying to please your lender?  Too much emphasis is placed on what you need to do to make and keep your lender happy and loan you some more money.  Is this really the emphasis you want in your marriage?  Do you really want to spend excessive amounts of time keeping a stranger at a bank or credit card company happy with you so that they will loan you some more money?  It is difficult enough to manage your and your spouse’s expectations without having to manage the expectations of your lender.  Your lender becomes like a third wheel in your marriage demanding more and more of your time and money.  This is not what a marriage should look like.

So now what?  Realizing the strain and stress that debt has already placed on your marriage is the first step in your recovery.  Identifying your debt as a problem in your marriage and agreeing that it needs to be removed is even harder to digest as it goes against your old expectations.  The next step is stop adding more debt right now, today, at this very moment no matter how hard this may be.  Change your expectations from having a debt ball and chain in your marriage to freeing you and your spouse.  The only way to remove the debt ball and chain is little by little, dollar by dollar, pain by pain, but the benefits to your marriage will be significant.

No one goes into a marriage with the attitude that they are going to destroy it, yet that is precisely what happens with a debt ball and chain.  The burden becomes too much and one person wants out no matter what the financial cost.  It is never too late to turn around and choose a different path, a path that does not have a ball and chain but rather freedom to live, fail, and succeed.

For more information, watch this video.  

Repairing, restoring, and rebuilding relationships takes time, energy and effort.  If you find yourself needing more help during this process, please call our offices at 407-647-7005 to schedule an appointment.  Or you can send me a quick email at