It’s time to change the way people view bankruptcy. Many people feel a significant amount of guilt or even shame. They don’t want to file for bankruptcy. They think that others will judge them for doing so. It almost feels like “cheating” because they took out the loans or took on a certain level of debt that they now will not be paying back.
But this is all a major misconception. This stigma sometimes keeps people from filing for bankruptcy, even though it would be very beneficial for them. That’s why it’s important to consider why people feel this way and why it may not quite fit their actual circumstances.
What causes bankruptcy?
The reason that people feel guilt or shame is often that they think of bankruptcy as their own fault. They assume that they made poor financial choices and that’s why they are in this predicament. They believe that others will look at it the same way, leading to judgment or an impact on their reputation.
The reality is that many people file for bankruptcy for things that are entirely out of their control. It’s probably not your fault at all. For example, maybe you suffered an injury or an illness and now you have overwhelming medical bills. This is certainly not a type of debt that you choose to take on, but it could lead to bankruptcy.
Or, perhaps you had a realistic budget and a good income, but the company recently went through layoffs and you lost your job. Now you’re facing bankruptcy because your budget doesn’t work, but that is not due to anything that you did. You would have been fine without the layoffs.
The reality is that bankruptcy can be a very helpful legal tool. Be sure you know what steps to take if you are interested in using it.