A Reliable Partner. An Experienced Adviser.

Photo of Ira C. Yellin

The mental benefits of filing for bankruptcy

On Behalf of | Jun 4, 2024 | Bankruptcy

It’s easy to get into debt and can be much harder to get out of it. The inability to escape it can take a massive emotional toll on people. Debt could leave you stressed, angry, anxious about how you are going to pay and more.

Anything that can help you resolve the situation could be mentally beneficial as well as financially so.

Some debts have a bigger negative mental impact than others

Research shows that debts someone believes that they could have avoided, such as those caused by overspending on credit cards can have a worse impact on their mental health than something they could not so easily avoid, or where the benefits of the debt were more obvious. For example, a student loan debt gives you an education in return. Debt from medical bills was the price you paid for better health. You are less likely to feel guilty or ashamed of those than you are if you know you blew money on designer clothes.

Mental issues could make it harder to pay debts

If you spend your nights unable to sleep due to worrying about your debts, you won’t be as effective in your days. You might not be as productive at work, causing your sales figures and commissions to slump. You might not do as well in an exam, reducing your ability to secure better-paying work. As such, the mental toll of debt can lead to a need to take more debt on.

Debt won’t go away on its own and as unsettling as it can be, the best thing to do is to face it head-on. Accepting the severity of your situation and seeking guidance as to your options is crucial. If bankruptcy can help you escape the situation – and allow you to rebuild – then it is wise to consider it as a potential option.