Why filing for bankruptcy is not a source of shame

On Behalf of | Dec 7, 2023 | chapter 7 |

Filing for bankruptcy often carries a stigma, a sense of personal failure or financial irresponsibility. However, this perception is almost never grounded in reality. At its core, bankruptcy is a legal tool designed to provide individuals and businesses with a fresh start. Understanding why filing for bankruptcy is not a source of shame is important, as a sense of embarrassment shouldn’t hold those who need to take advantage of this opportunity from doing what needs to be done. 

It’s important to recognize – and make peace with – the fact that bankruptcy laws were created to offer relief to those overwhelmed by debt. It’s a legal process recognized and regulated by the government, intended to help people regain financial stability. Viewing bankruptcy through this lens shifts it from a personal failure to a responsible step towards financial recovery.

Bankruptcy eases burdens, it shouldn’t inspire them

The vast majority of the time, bankruptcy results from unforeseen and uncontrollable circumstances such as medical emergencies, job loss or economic downturns. These situations can happen to anyone, regardless of their financial planning or responsibility. As such, bankruptcy offers a chance to reset financially. It provides relief from debt that might otherwise be insurmountable due to circumstances beyond the filer’s control.

The burden of overwhelming debt can lead to significant stress and anxiety. Bankruptcy can alleviate these feelings by stopping harassing calls from creditors and providing a clear path to getting one’s finances back on track. And, in a way, bankruptcy can be a very responsible choice as it contributes to broader economic stability. It enables people to participate again in the economy, which is beneficial for society as a whole.

Ultimately, bankruptcy is more common than many people realize. Recognizing its prevalence can help reduce the shame associated with it. Many respected individuals and successful businesses have gone through bankruptcy and emerged stronger – and more confident – than ever before.