Why Most People are Scared of Bankruptcy

| Opinion | June 25, 2020

by Ray Bulaon, Attorney
The word “bankruptcy” is packed with all sorts of negative emotional triggers.

It sounds bad — even dirty. It’s embarrassing. (What if people find out?!) People paint ugly pictures of what their lives will look like post-bankruptcy.

But it’s not true.

Bankruptcy is an opportunity to close one chapter of your life and open a new chapter — a better chapter. In this new chapter of your life, you get to make choices without the constant pressure of creditors breathing down your back. Your days will feel easier, your responsibilities more manageable, and your choices more abundant. How’s that for a change?

To make the most of this new chapter, though, you have to face your fears. What I mean by “facing your fears” is this: Instead of worrying about how your bankruptcy will impact your life, make a plan so that you are in control. Intentionally set a course of action to make sure that your bankruptcy does not negatively impact your life.


What does “facing your fears” look like? Below are some practical suggestions that might help.

Number 1: Start by making a list of all the things you are worried about with respect to your bankruptcy. This is important because it gives you the power to begin taking action steps to mitigate this fear. If the fear exists in your mind, but you have not put it to paper, you will continue ruminating about all of the what-ifs. This will cause your feelings of fear to intensify.

Instead, make a simple list of your fears. This list might include things like:

I am worried that my friends and my family will find out.
I am worried that my boss will find out.
I am worried that I will not qualify for loans or credit cards.
I am worried about my credit score.
I am worried that I will be unable to get a job.

Number Two: Now, for each item on the list, make a list of all the things that are within your control that you can do to manage your fears.

OK, so for instance, let’s say that you are worried that your friends and your family will find out (which is highly unlikely). What are the things that are within your control that you can do to manage your fears?

You might decide that you will feel better if you tell them directly about your bankruptcy. If this is your decision, you can then go about deciding when and how you will tell them. (Frankly, it’s none of their business and no one completely understands what it’s like to be in your situation unless they were in your shoes. But, I get it. Whether your fears are reasonable or not, they’re real to YOU, and unless they are addressed, they can be paralyzing to the point that they stop you from taking action and moving forward with your life.)

On the other hand, you might decide that because friends and family members are unlikely to find out about your bankruptcy, you will refrain from telling them – but, instead, create a plan for how you wish to discuss it if, let’s say, it ever comes up in a conversation.

There is no right or wrong answer here, and you may find my example simplistic. But the only point I’m making is that you have to face your fears and determine what you can do that is within your control to address them. Having a plan will put many of your fears to rest.
What are some of the other things you can do to face your fears? If you are worried about the impact the bankruptcy will have on your credit score, you can learn everything you can about credit-scoring, budgeting, and managing finances so that you feel empowered to make strong financial choices and build a better future for yourself and your family. You can talk to your bankruptcy attorney and ask for tips and advice. You can read books, take courses, or go online and search for free information.

The truth is: People file for bankruptcy all the time, and they go on to live lives that are filled with happiness, laughter, and financial security. Your bankruptcy will not be a negative force if you make a proactive decision to face your fears and recover through bankruptcy. If you decide right here and now that your bankruptcy is going to be a positive force, then it will be! If you have not read my book, “What You Need to Know Before Filing Bankruptcy,” you can download it free of charge at www.beforefilingbk.com.

Ray Bulaon is a bankruptcy attorney in Valencia who has successfully helped more than 5,000 clients in getting out of debt. For a free consultation, call 866-477-7772 or 661-775-4880.

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