Announcing bankruptcy is undoubtedly a heart-wrenching and personal decision. Though you might want to keep this secret all to yourself, that's not the thing to do. Your financial situation affects the people in your life. Your friends and family deserve to know what's going on so they can help you.
Bringing up such a serious topic to your friends and family is a tough. You might feel guilt that you have let these people down. People who raised you, invested in you, and expected so much from you now know you are bankrupted. It's a difficult conversation to have.
However, it's time to seek support. Your family and friends have seen you grow up. They know who you are. They know that it's not your fault. But even if it is your fault, those who care about you won't abandon you. You are not alone. Most of the time, filing bankruptcy will be the only way to get your life back on track. Instead of hopelessly struggling to succeed, it's better to admit you need help.
What's your first step?
First, find out for yourself if bankruptcy is the best possible option for you. Next, talk to your friends and family. You are going to need your support group on board with your financial future. Once everyone is on the same page, you need to officially file for bankruptcy. You are required to complete a Means Test to know what your situation qualifies you for (Chapter 7 or Chapter 13.) Professional help is available to help you figure this all out.
Though it's a difficult thing to admit, be reminded that you are not alone. Bankruptcy is common in today's economy. 1.5 million americans filed bankruptcy in 2010. You are not alone. There is often a stigma of disgrace associated with bankruptcy, but shouldn't be the stereotype.
Our economy is still recovering after the hit it suffered during the double-dip recession and many people will continue to feel the impact of this crisis. Oftentimes, bankruptcy is because of the socio-economic surroundings, and isn't 'your fault.'
What would be your financial future after bankruptcy?
Some friends and family members might be concerned about how bankruptcy could negatively affect your credit score. Don't be offended: They worry because they care about you. While they may think bankruptcy will ruin your creditworthiness and make you ineligible for big purchases or employment opportunities, that's not always the case.
Because bankruptcy has become so common, many creditors don't consider this dent in your credit report a deal-breaker. They understand that most Americans are struggling financially these days.
Having an instance of bankruptcy in your credit report is far less damaging than struggling to pay overwhelming debts. Though it is up to you to make such a difficult and personal decision, informing friends and family can help give you support.
This article was originally published on www.ovlg.com. It has been republished here with permission.
I'm a 27-year-old freelance journalist living in Oakland. I work for Oak View Law Group, a leading consumer and bankruptcy law firm based in CA and operational across US. I’m a numbers geek who loves helping others to find the right balance between frugal finances and living life fully.