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How To Survive A Bankruptcy

Updated on February 16, 2013

Facing a bankruptcy can be one of the most traumatic stressors an adult can face. For most people it will trigger emotions such as shame, worthlessness, and guilt. In our society it is not just a matter of necessity or pride to provide for one’s self and family; but, it is also a matter of fitting in as a contributing member of the tribe.

What Is Bankruptcy?

According to the Merriam-Webster Dictionary, the term: bankrupt is defined as, (1) ‘an insolvent person; esp : one whose property is turned over by court action to a trustee to be handled for the benefit of his creditors.’ And, (2) ‘reduced to financial ruin; esp : legally declared a bankrupt.’

Wikipedia defines bankruptcy as a ‘legally declared inability or impairment of an individual or organization to pay its creditors.’

It’s no wonder there has been a stigma attached to filing for bankruptcy. The word ‘insolvent’ expresses ineptness, incapability-a failure; an ‘impairment’ that implies a deficiency. In a society that thrives on success through wealth filing for bankruptcy can trigger many negative emotions.

Debt = Ball & Chain

Facing overwhelming debt is no fun!
Facing overwhelming debt is no fun! | Source

Why File For Bankruptcy?

Making the decision to file for bankruptcy should not be taken lightly. Nor, should it be the first action taken when one is faced with overwhelming debt. But, keeping a clear head and examining emotions such as fear are important steps in discovering if bankruptcy is the right choice for you.

Why should you examine your fear? Because fear is often present in emotionally charged issues and will alter your thought process interfering with clear thinking.

Here are some fears:

I am afraid I will lose my house.

I am afraid I will lose my job.

I am afraid I cannot provide for myself or family.

I am afraid I will end up on the streets.

I am afraid of what my friends and family will think of me if they knew my situation.

Being aware and willing to face one’s fears is empowering and allows you to listen with clarity at what your options are; then follow that guidance with an action plan and the resolve to stick to it. Two problems that block sound decision making are vacillation and procrastination. Indecision is an energy waster and will create confusion instead of clarity.

There are many reasons why a person will decide to file bankruptcy. Whether it is to protect your home and/or vehicle from repossession, or to offer a fresh start from insurmountable debt, sometimes bankruptcy is the only option. Two of the common causes for accumulated debt are catastrophic medical bills and job loss in which a prolonged unemployment has depleted one’s savings. So, what can one do?

Develope A Plan Of Action

1. Examine your options. People who feel backed into a corner will make decisions blindly, unable to think outside the box. Is there a temporary solution, such as moving to a cheaper place to live, that will afford the financial breathing space necessary until the situation eases?

2. Be pro-active not re-active. In the days of our crashed economy which left so many people jobless, and even homeless, it is not necessarily anyone’s fault. But, making yourself aware of your financial picture is your responsibility and part of your ability to empower yourself before any big hit. Yes, it may take some willingness to adjust ‘down’ in your lifestyle, but to sacrifice early on may result in avoiding bankruptcy.

3. Communicate. This is especially true for families. If you are single and concerned for your financial future talk with a respected financial advisor or family member who may offer support and suggestions. However, if you are part of a ‘husband-wife’ team that is a partnership and all parties involved need to be on board with the problem and the solution. Why communicate your worries? So your spouse can assist in the overall game plan.

Imagine yourself being aware there are rumors at work that you may be the next ‘cut’ while your spouse is shopping and eating out daily. Eventually there would evoke great resentment and blame.

4. Consult with an expert. An expert, when facing legal issues and the possible loss of a home or car, does NOT mean good, ole Uncle George who loves to give his opinion about money. It does mean finding a competent, reliable bankruptcy attorney whose profession is to help clients protect their assets.

5. Make your decision; be on board as a team and stick with your plan. Take the steps needed to follow the advice of the attorney. No blame-just ‘game’.

Remember: if you are in serious financial distress, in which you are behind in your mortgage payments, get help quickly. Fear can trigger immobility or avoidance, share the problem and embrace any support.

A helpful video regarding bankruptcy:

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    • Denise Handlon profile imageAUTHOR

      Denise Handlon 

      9 years ago from North Carolina

      Gail-thanks for reading and commenting. I try to bring info in and then a 'take action' because some people get stuck with a 'now what', after the info. I suppose it is part of the 'nursing process' that spills over in other areas of my life.

      Mark-so nice to see you here. Thanks for taking the time to read and comment. I agree, our country is in grave economic crisis at this time. Thanks for the vote up/useful.

    • the clean life profile image

      Mark Bruno 

      9 years ago from New Jersey Shore

      One more great hub Denise. You have all the facts needed for one to decide if they should in fact file for bankruptcy.

      Excellent advice in helping those in financial trouble.

      Thank you for sharing this most important subject for our society is indeed in financial trouble with really no end in site.

      Voted UP & Useful

    • Happyboomernurse profile image

      Gail Sobotkin 

      9 years ago from South Carolina

      Great hub. I particularly liked the plan of action advice.

    • Denise Handlon profile imageAUTHOR

      Denise Handlon 

      9 years ago from North Carolina

      Credence2-nice to see your here. Thanks for the comment. It is a timely subject and I'm grateful that the HP community has brought this in at the beginning of the year.

      CDL--so sorry to hear of that. I've a good friend who was homeless for several months. It is a hardship. I agree that the hard part is making the decision. Of course there is a lot of emotional baggage that can interfere with clear thinking when it comes to something like filing bankruptcy. Good to see you are back on your feet.

    • CDL Career Coach profile image

      CDL Career Coach 

      9 years ago from Eugene, Oregon

      I've been through a bankruptcy. It's hard. The hardest part is deciding to do it. I never would have thought I'd be "one of those people" but I'd to it again and sooner if I had to do it all over. As it was, waiting so long and trying to find other options ended up losing my house as well and being homeless for a couple years after the bankruptcy.

    • Credence2 profile image


      9 years ago from Florida (Space Coast)

      This is very informative and quite timely, thanks Denise

    • Denise Handlon profile imageAUTHOR

      Denise Handlon 

      9 years ago from North Carolina

      Thanks Darski. I appreciate your comments and vote. :)

    • Darlene Sabella profile image

      Darlene Sabella 

      9 years ago from Hello, my name is Toast and Jam, I live in the forest with my dog named Sam ...

      Excellent hub, this was placed as a law in our country to help many and to give a second chance to many. We all need to understand how this works and that is so great about this hub. rate up and peace & love darski

    • Denise Handlon profile imageAUTHOR

      Denise Handlon 

      9 years ago from North Carolina

      Hi Carrie-I agree, it isn't something I would want for anyone. I had a roommate once who had considered it. I asked her to wait and try a debt reduction plan instead and she did. To this day she has thanked me for helping her see other options.

      Maciuras--nice to meet you. Thanks for visiting my hub and leaving a comment.

    • maciuras profile image


      9 years ago from Bialystok

      Nice hub, banckruptcy is nightmare, thanks for good information.

    • carrie450 profile image


      9 years ago from Winnipeg, Canada

      I feel bad for anyone who has to declare bankruptcy. I watched my brother suffer through this when he lost his business and I wouldn't wish it on anyone. A very informative hub Denise.

    • Denise Handlon profile imageAUTHOR

      Denise Handlon 

      9 years ago from North Carolina

      Thanks Rich for your feedback. 20 years ago I would have been quite judgemental towars anyone filing for bankruptcy. However, I have changed my views in todays economy. Not everyone who files is trying to get out of paying for there credit card sprees. Many people have been adversly affected by company downsizing. Talk with you later, :)

    • richtwf profile image


      9 years ago

      A very useful hub and one in which provides excellent general advice to anyone who might befall this terrible life event.

      Very true that we must accept our predicament and then face our fears sooner rather than later otherwise any vacillation or procrastination could potentially worsen our situation if we don't act quickly enough. The sooner we take action, the sooner we can have some peace of mind!

      Great hub Denise and thanks for sharing!


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