5 Emotional Effects of Extreme Debt, Bankruptcy and Recovery

Being stuck in a circumstance of overwhelming debt can cause you to go through some seriously negative emotional repercussions. Money stress is one of the major sources of marital discord and can be a factor leading to divorce. This can make everything much worse. When you're living paycheck to paycheck and stuck in a financial mess, it can be hard to think clearly, make plans or have any peace of mind because you're focused on staying afloat. Here's a look at some of the emotions you're likely dealing with and how finding a debt solution can help you feel better.

Denial and Excuse-Making

Early on in a situation that turns out to be catastrophic debt, there is often denial. Your money gets a little tight, but you make excuses. You want to pretend everything is okay, so you may keep spending as you always have even though you've lost a job, had a serious increase in your mortgage due to an adjustable rate mortgage increase or some other decrease in income/increase in expenses. These feelings of denial can lead you even deeper into debt.

Guilt and Fear

For those with a family to support and others relying on them, financial problems can produce even more of an emotional strain. If this is your circumstance, you may feel guilty that you're not providing better for them, fear that it will get worse and worried that you're disappointing those you love that rely on you. This can be a terrible sensation and can make it hard for you to focus on worth or figure out a way out of your debt dilemma further complicating things.

Shame and Remorse

Many who are deep in unmanageable debt feel an acute sense of embarrassment or shame. No one wants to admit their finances are out of control. If you are dealing with this, you may want to keep what's going on secret because you feel like people will think less of you. You may also experience a sense of remorse and think about times you've wasted money or perhaps overspent. You can't change it, yet you may replay things in your mind and think what you could have done differently.

Anger and Blame

If you lost your job, were injured or had some other external circumstance that led to your debt situation, you may be caught up in blaming the person you think is responsible. Or you may be angry and wonder what you did to deserve this and why others are living comfortable lives while you're stuck struggling. Any of these emotions can come together, in waves and can recur weeks or months after you experienced them. Until you get resolution, it can be hard to feel happy again.

Resignation and Hopelessness

This emotion is particularly troublesome because it can prevent you from taking action to get out of your unfortunate financial circumstance. You may get so beaten down by dealing with collections and maxed out credit cards that you just resign yourself to being broke. You feel hopeless and think there is nothing to be done and you may as well learn to live with it. While it's natural to progress to this bottom-of-the-barrel emotion, you need to shake it off as fast as possible.

Think about debt as a loss, like a death. You go through stages of grief and then move into acceptance. The funeral is a trigger event that starts you progressing through emotions and toward recovery. But with debt, there may not be a trigger event that allows you to draw an emotional line in the sand and start to move on and get better. You can wallow in debt indefinitely unless you take a stand and make a change. Bankruptcy can be that trigger event that not only helps you get out of the debt that's causing these negative feelings and to recover both emotionally and financially.