There is much said and reported on the financial aspects of bankruptcy and what it means and does for peoples financial circumstances. There’s less to be found on the emotional and psychological effects of bankruptcy even though this can have a more profound effect on people’s lives.
So what actually is bankruptcy?
Bankruptcy is a formal and legal process of dealing with debts you are unable to repay. The bankruptcy procedure is designed to free people from overwhelming debts and give them the opportunity to make a fresh start. An important part of this process is to make sure the assets of the person going bankrupt are shared out fairly to the creditors who are owed the money.
The whole process is administered by an appointed Trustee who has to be a licensed insolvency practitioner. The Trustee is responsible for administering the process, ensuring the legal procedures are followed and for discharging the person from bankruptcy at the end of the process.
It’s a difficult time for people
The bankruptcy process can be a very difficult time for people who can often find themselves tense, anxious, unhappy and also ashamed and depressed. This can come on top of a period where people have already been experiencing hardship and distress whilst trying to manage difficult financial circumstances and for some this could have been happening over an extended period of time.
And so people can find themselves already emotionally drained going into the bankruptcy process which can then add additional demands on their situation and further impact their mental and emotional condition.
People also worry about what friends and family will think of them and this can lead to feelings of low self-esteem, isolation and depression. Add to this the natural concerns of the effects on their employment, credit rating and their financial future and it is easy to see why the bankruptcy process can have far reaching effects on people’s emotional and psychological state of mind.
Help and support
It may be important for people to seek emotional help, support and therapy if required as they go through the bankruptcy process in order to keep things in perspective and find ways of coping and dealing with the effects of what they’re going through.
So for example the common worry that people can have that their debt problem is so large not even bankruptcy will solve it is misconceived and just the simple fact of knowing that bankruptcy is always a viable option can help immensely in allaying fears and worry.
Helping people to move away from the view of bankruptcy as a sign of failure and something to be ashamed of is another small but significant form of emotional support and guidance that can make all the difference to the person or family involved.
Getting things in perspective by advising people of the fact that they are not alone in the bankruptcy process and that many other people have had to go through the same process and emerged safely at the other end is another key support element that helps.
If people can view bankruptcy as a path to a new beginning then the journey may not be quite so intimidating and traumatic.