Why stigma concerns shouldn’t stop you from filing for bankruptcy

On Behalf of | Jun 14, 2024 | Bankruptcy

Filing for personal bankruptcy is a process that was traditionally associated with a sense of shame. However, this perception has – thankfully – shifted dramatically since the Great Recession of 2008. The opportunity to file for bankruptcy was created in recognition of the fact that, sometimes, the only way to free individuals from the burdens of overwhelming debt is to provide a court-approved restructuring and/or discharge of that debt. 

More and more – partially due to recognition of the fact that responsible adults can fall into financial ruin through no fault of their own – most people truly understand that filing for bankruptcy is nothing to be ashamed of. Just as businesses utilize bankruptcy to reorganize and continue operations, individuals can also use it to get back on their feet. 

You are not alone

Bankruptcy is more common than many realize. Numerous individuals, including successful entrepreneurs and public figures, have filed for bankruptcy and subsequently rebuilt their lives and careers. It’s a tool used by millions to overcome financial setbacks caused by unforeseen circumstances such as medical emergencies, job loss or economic downturns. Understanding that many people have been in similar situations can alleviate feelings of isolation and shame.

Living with overwhelming debt can cause significant stress and anxiety. The constant pressure from creditors, the fear of losing assets and the burden of unpaid bills can take a toll on mental health. Filing for bankruptcy can provide emotional relief by halting creditor harassment through the automatic stay provision, allowing filers to focus on rebuilding their lives without the constant fear of financial ruin.

Far from a reason for shame, filing for personal bankruptcy is often a responsible decision for those facing insurmountable debt. It is a legal right designed to offer relief and a pathway to financial stability. By viewing bankruptcy as a fresh start rather than a failure, filers can focus on rebuilding their lives and securing a brighter financial future.