Bankruptcy stigma: Can you avoid it?

On Behalf of | May 24, 2024 | Bankruptcy

Declaring bankruptcy has had a negative connotation for years. Historically, society has viewed people who filed for bankruptcy as “irresponsible.” And this stigma has caused many people who deserve a fresh start to miss out on their constitutional right.

Yet, since the Great Recession of 2008, the realities of bankruptcy stigma have changed significantly. As such, it’s important to keep the following in mind if you’re hoping to avoid stigma as you pursue debt relief.

It’s mostly in one’s mind

Some people avoid declaring bankruptcy because they feel guilty for not paying the debts and bills they are responsible for. They may believe they are “taking the easy way out.” If this is how you feel, it proves you are a responsible person who has experienced difficulties that have substantially affected your financial stability in ways that you wish you could handle simply by repaying your obligations. Consider viewing bankruptcy as your last resort – it can protect you while you get back on your feet so that you can take care of your responsibilities sustainably moving forward.

You are not alone

When going through debt-related challenges, you may believe you are alone. You may also be afraid of what people will think when they discover you are filing for bankruptcy or the mere fact of them learning about it. However, you may be surprised by how supportive the people around you can be. Chances are a loved one has previously filed for bankruptcy or knows someone who has. Bankruptcy is neither as rare nor as stigmatized as it once was.

With that said, if you are experiencing bankruptcy stigma, focusing on the benefits of declaring bankruptcy can help you overcome it. You should also consider seeking legal guidance to be more effectively supported as you move forward.