Feeling Guilty About Considering Bankruptcy?

It’s completely understandable to feel guilty when contemplating bankruptcy, especially if you’ve been responsible for making payments in the past or have a personal connection to your creditors. However, it’s important to recognize that bankruptcy is not about taking the easy way out—it’s a legal right that helps you regain control of your finances, and sometimes, it is the best option to protect your family’s future.

Why You Shouldn’t Feel Guilty

Many people feel a sense of personal responsibility when it comes to paying off debts, especially when it involves small businesses or local institutions that may have extended credit out of kindness or trust. However, when you are facing overwhelming financial challenges, it is important to remember:

  • Creditors Are Prepared for Risk: Large banks and lending institutions, such as JPMorgan Chase, regularly report billions of dollars in revenue and profits. Their business models are built on the idea that some debts will be unpaid. They know the risks involved, and they can absorb the losses from debt defaults.
  • You’re Not the Only One: Debt problems can happen to anyone, and often, they arise from factors outside of your control, like job loss, medical emergencies, or unexpected life events. In fact, many bankruptcy filers experience a financial disaster that they never saw coming.
  • Your Family Comes First: While it’s easy to feel guilty about discharging debt, your priority should be the well-being of your family. By considering bankruptcy, you’re choosing to make sure you can get back on track financially and protect your future.

The Benefits of Bankruptcy

Bankruptcy is designed to give individuals a fresh start. Some of the key benefits include:

  • Automatic Stay: When you file for bankruptcy, an automatic stay goes into effect, meaning that creditors must stop contacting you, and any collection actions (like garnishments or foreclosures) are halted immediately.
  • Discharge of Unsecured Debt: In Chapter 7 bankruptcy, most of your unsecured debts (such as credit cards and medical bills) can be discharged, meaning you’re no longer legally responsible for paying them.
  • Protection of Exempt Assets: You can keep certain exempt assets, like your home, car, and tools of trade, based on your state’s exemption laws. This allows you to protect your livelihood and avoid losing valuable property.
  • Chapter 13 Benefits: If you file for Chapter 13 bankruptcy, you enter a court-approved repayment plan, often with a reduced interest rate, and may even have the opportunity to remove a second mortgage or reduce the amount owed on your vehicle.

The Reality of Creditor Profitability

Remember that creditors (especially large corporations) have made profitable business decisions based on the expectation that not all loans will be repaid. While it’s difficult to think about walking away from a debt, it’s crucial to recognize that these companies are still thriving and profiting from their investments, even when debts aren’t paid in full.

Do What’s Best for You

While bankruptcy is a significant decision, it can be a necessary step to regain your financial stability. Don’t let guilt or shame prevent you from considering it, especially when you’re making a choice that will allow you to focus on your future and your family’s well-being.

If you need help understanding the bankruptcy process and whether it’s the right solution for you, consult with an experienced bankruptcy attorney. We’re here to guide you through your options and provide support as you move toward a debt-free future.