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: