How to Emotionally Recover From Bankruptcy

If you owned a failed business, accumulated more debt than you could handle, or suffered some sudden expenditure, you may have had to file for bankruptcy. Bankruptcy has a number of logistical side effects, including crashing your credit score for up to 10 years, but some of the worst effects are emotional ones. You may feel a devastating blow to your self-esteem and self-worth, and believe that you’ll never be able to get in good financial standing again.

These aren’t just fleeting feelings, either—according to US News, people who have filed for bankruptcy are susceptible to depression and other mental health issues, which is why you owe it to yourself to recover emotionally from bankruptcy as you’re recovering financially.

How to Recover Emotionally

These are some of the most important ways you can recover from bankruptcy emotionally:

1. Understand the bankruptcy process.

First, avoid making bankruptcy out to be more than what it is. Take the time to learn the intricacies of the bankruptcy process, and exactly what it means for your credit. According to Rowdy Williams, about 21 to 50 days after you’ve filed for bankruptcy, you’ll meet with creditors. Assuming the process continues smoothly, your debts will be discharged after 6 months or so (for Chapter 7 filings), or after a period of a few years (for Chapter 13 filings). After that, your credit score will take the hit, and you can start your path toward recovery, which will take several years.

2. Know that you aren’t alone.

According to US Court data, there were just under 800,000 bankruptcy filings in 2016, which is down from a peak of 1.5 million just a few years before. Bankruptcy is more common than you realize; you aren’t alone, and you certainly aren’t a failure. Knowing that there are others going through the same process may bring you some measure of relief.

3. Focus on the good things in life.

Try your best not to focus on your financial woes. Do you have a loving family? Are your parents still around, and in good health? Are you in good health? Do you have good friends? Do you like your job? Are you still able to read your favorite books or watch your favorite movies? There are countless good things in your life to focus on—you just need to shift your attention to them.

4. Don’t compare yourself to others.

Comparing your financial situation to those of others is only going to make you more miserable. Comparisons are almost never beneficial for your own happiness; remember, you’re competing against yourself here. What other people make and what other people do shouldn’t matter to you.

5. Set a plan for recovery.

You’ll start feeling better once you make some progress, so set a series of goals (both long-term and short-term) to pull yourself out of this situation. Create a strict budget, apply for credit and pay your bills on time, and start improving yourself.

6. Seek professional mental health.

If you’re struggling with depression, anxiety, or other mood disorders, don’t let yourself suffer any more than you have to. Use a resource like MentalHealth.gov, or talk to your friends and family members to find a mental health professional who can help you get better.

7. Take things one day at a time.

Don’t set your sights on what your credit score will look like in 10 years, and don’t imagine what your life will look like in a year or two. Instead, take things one day at a time. Focus on the present moment.

Accepting Difficulty

These strategies aren’t magic remedies to instantly make the pain and embarrassment of bankruptcy go away. You’re still going to experience tough days, and face harsh setbacks. But there’s much at stake here; you’re in a vulnerable position, and those who aren’t committed to recovering face a higher risk of depression, isolation, and even suicide. You need to accept that you’ll face hard days, and that some modes of recovery won’t come as easily to you as they will others. Do that, and keep taking baby steps forward, and eventually you’ll move on from your bankruptcy—both emotionally and logistically.