The idea of declaring bankruptcy has always had a certain stigma attached to it, and the mere mention of the word is enough to fill most people with a sense of dread and shame.
After all isn\’t bankruptcy simply admitting to the world that you\’re incapable of managing your own finances and that you\’ve gone completely broke? Isn\’t it just a declaration to the world that you\’re a financial deadbeat?
In reality bankruptcy is less about shame, guilt and any other negative feelings associated with it and more to do with rebuilding your life. What most people don\’t realize is that declaring bankruptcy not only requires a lot of courage to undertake in the first place, but is actually one of the most sensible financial moves a person can make to get their life back on track.
To frame the idea of how little shame should be involved with the process of bankruptcy on a personal level it\’s important to remember that the reason why so many individuals have been declaring bankruptcy since 2008 is because most financial institutions were lending vast amounts of money to people with no investment background for real estate investment and charging ludicrously low interest rates on it. This means that the banks and mortgage lenders are just as much to blame for the current avalanche of bankruptcy cases as anyone else is.
Even outside the recent global financial crisis bankruptcy still needs to be viewed with a pair of pragmatic eyes which see the entire process for what it is – helpful! Declaring bankruptcy is an admittance on your part that you need to restructure your finances, and that you\’re currently living beyond your financial means. If more people were to declare bankruptcy sooner rather than later there would be fewer court cases involving credit card debt of several hundred thousand dollars and/or multiple homes and cars being repossessed, with lives and relationships being ruined in the process.
It\’s only the privileged few who have been through the bankruptcy process who understand that shame is the very last thing they feel in relation to having a clean financial record again. Obviously having to go through filing for Chapter 7 or 13 bankruptcy is a major life event, but it\’s equally also a major life lesson which is more valuable than you can possibly imagine.
If bankruptcy teaches you nothing else in life it clearly demonstrates just how valuable a healthy credit rating and a healthy approach to your finances really is.
Having a poor credit history for 2 years might seem like a big deal right now, but take it from us it\’s a far superior option to spending the rest of your days on this planet shouldering an unmanageable mountain of debt which slowly crushes the life out of you.
Those first few steps are the hardest, but they\’re also the most valuable.
Remember that once you\’ve discharged or repaid all of your debts owed that you have a clean financial record and you can start your life all over again, with far better money management skills available to you too.
If you feel the need to discuss your current finances with anyone then please consult a qualified and experienced bankruptcy lawyer and/or a financial advisor.