People tend to focus on bankruptcy as a financial decision. Something that if done correctly, could help you go from a bad financial situation to a better one.
While improving your financial situation is reason enough to file, you should also consider the benefits it can bring to your health.
Debt can be dreadful for your mental health
Research from the University of Alabama at Birmingham has shown that debt can increase depression, anger and anxiety. It can also lead to stress, shame and guilt.
Some debts are more harmful than others
There is less stigma attached to some debts than others, and less stigma can mean less of a negative effect on you for having that debt. The research found student loans were less damaging to a person’s mental health than credit card debt, for example. Society pats people on the back for taking out student loans, while it often judges people as careless for getting into credit card debt.
That is not to say that student loans are worry-free. They can still keep you up at night and harm your well-being.
It’s hard to function at your best if you are suffering psychologically
Debt-related mental health issues could also make it harder for you to pay off that debt. You might not perform as well at work as if you were stress-free, so miss out on promotions that would have given you a pay rise. If you are a business owner you might not have the clarity of mind to make the decisions that take your company forward and increase profits. All because of the debt hanging over your head.
Learning more about how bankruptcy works is a positive step that could help you improve your health and your finances.