Updated: Jul 12, 2021
Bankruptcy is a financial technique in which you declare that you cannot repay your creditors now or see a way to repay them in the future. It should be your last resort because it will impact you for at least 7 years. Depending on your income and the amount of money you owe, an individual may declare chapter 7 or chapter 13 bankruptcies. However, in either case, bankruptcy is a fairly public affair. Your name and address will be published in at least one of the local newspapers for all of your friends to read, and your neighbors will see movers coming to repossess some of your items. For many people, the worst part of bankruptcy isn’t losing the money; it’s losing pride and dignity.
The first way to deal with this is to realize that most of your friends and family have gone through money problems at one time or another in their lives. Although they may not have resorted to bankruptcy, they may feel like they are drowning in debt. Simply put, people will understand. Even though you may feel like everyone is snickering at you behind your back, the truth is that most people are actually empathizing with you.
Also, realize that most will not know you’ve declared bankruptcy. Most people do not take the time to read the newspaper that carefully, and even though the word does travel fast, it is not a topic that most people will bring up because it simply is not that interesting. You might feel that you are the evening’s headline news, but most people probably will not ever know.
However, it is important to continue with the process, even if people do find out. If you are embarrassed, simply understand that many people in this country are going through the same thing. You are not alone. In fact, you may be able to get counseling to help you go through the bankruptcy process. Try finding a local financial coach. You may be surprised at how many people have declared bankruptcy and have gone on to be very successful. You and many others are able to go through with this process.
If bankruptcy is the best thing for your family and your last resort, it is most important that you continue with the declaration. Take care of yourself first, then worry about what other people have to think. The most important thing is not what your neighbors have to say, but what you are doing to get yourself back on track financially so that your future can be brighter. You can do this!