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How Can Bankruptcy Affect Your Mental Health? Psychologists Offer Coping Strategies

By HERWriter
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With the emphasis society puts on money and materialism, being in debt is not looked highly upon. Bankruptcy is even worse. Imagine what having no money can do to someone’s state of mind.

Bankruptcy seems to be fairly common in this economy, so at least there is comfort in numbers. Although most people think of businesses filing for bankruptcy, consumers or individuals can file for different types of bankruptcy as well.

According to the American Bankruptcy Institute, “U.S. consumer bankruptcy filings totaled 1,165,172 nationwide during the first nine months of 2010 (Jan. 1 to Sept. 30), an 11 percent increase over the 1,046,449 total consumer filings during the same period a year ago.”

Bradley Klontz, a clinical psychologist in Hawaii, is a co-author of "The Financial Wisdom of Ebenezer Scrooge: 5 Principles to Transform Your Relationship with Money,” and said that bankruptcy can affect mental health.

“Bankruptcy is an enormous financial and psychological stressor,” Klontz said in an e-mail. “Financial stress can lead to a loss of personal control, depression, anxiety, shame and relationship problems.”

Many people put too much emphasis on money, so that’s why suffering can result from bankruptcy.

“Many of us confuse our self-worth with our net-worth,” Klontz said. “As such, financial problems can deal devastating blows to our self-esteem. Bankruptcy can lead to feelings of guilt and shame, and cause us to isolate from our family and friends out of embarrassment.”

However, in times of despair especially, social networks are necessary to psychological health.

He said that men may suffer more because they are considered the main provider of finances, and women generally deal with the strain better.

“Women often have a more balanced sense of self, as they tend to have closer emotional and social ties to family and friends,” Klontz said. “As such, their sense of self and value to others is often more diversified them men, whose self-esteem may be invested exclusively in their role as a provider.”

Here are some ways Klontz said bankrupt individuals can deal with mental health effects:

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EmpowHER Guest

Savings account for emergencies? During a period of or in the run-up to a bankruptcy order???

CLEARLY this writer is unaware that in bankruptcy all savings are declared and taken as part of the debt clearance, and that during the period of the court order that the bankrupt person is NOT permitted to have more cash than reasonably is necessary to feed or clothe oneself. Poorly researched, shallow and insulting to those of us who have had to endure this horrendous experience.

Also it is laughable, how this writer believes that one who is on the verge of bankruptcy might have the spare pennies to put aside in a savings account.
A word of advice to the EDITOR; ensure that those who you delgate to write about and give "advice" on such a sensitive and life-changing situation has the life-experience and general common sense to back it up.

June 9, 2016 - 6:59pm
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We value and respect our HERWriters' experiences, but everyone is different. Many of our writers are speaking from personal experience, and what's worked for them may not work for you. Their articles are not a substitute for medical advice, although we hope you can gain knowledge from their insight.