Filing for business or personal bankruptcy is one of the more difficult decisions you will make. Combine this decision with the unexpected negative emotions and at times things can seem to be overwhelming. See the article titled, “Surviving the Emotional Side of Bankruptcy” to help identify some of the negative emotions that are often experienced. Once you identify the negative emotions the next step is to cope and then finally to overcome the negative energy and look for what you can do.
Regain control. There are many factors that are completely out of your control during bankruptcy but there are some factors that are within your control. The economy, the value of your home and in some cases the prospect of a job in your area of expertise is beyond your ability to change. However, your spending habits, budgeting, taking care of yourself physically, and increasing your income potential are within your control. Place your energy into evaluating your current situation and begin to look for even the smallest of changes that you can make. Making many small changes can help to change your overall situation. For instance, you may begin clipping coupons, shopping at discount stores, garage sales or thrift stores for your needs instead of going to your usual stores. In addition, taking care of your health, eating right and exercise can help to reduce future medical costs. Look for the small things that you can change instead of the large things you cannot change.
Focus on the positive. It is easy to become focused on all of the negative things happening in your life right now as filing for bankruptcy makes them all too clear. The temptation is to allow the negative emotions to overtake you and focus on them instead of the positive. Bankruptcy has a way of taking a half-empty glass and making it three-quarters-empty (or more), yet there is still something left in the glass. However small the amount, give thanks for what you still have. Your possessions may no longer be in monetary form but they may be in relational form such as good friends and family or in physical form such as good health or spiritual form such as a strong faith in God. Whatever you have left, be grateful and give thanks daily.
Learn from past mistakes. The challenge of learning from past mistakes is to stop beating yourself up and stop dwelling on the same issue over and over. Replaying the moments of poor decisions again and again like a tape running in your head is not productive rather it is destructive. What is worse is labeling yourself as a loser or a failure for having made the mistake in the first place. A better solution is to write down the mistakes, evaluating each one separately to see if you really could have made a better decision. For instance, if you found yourself in an overvalued house before the crash of the real estate market, how much could you realistically have foreseen? Even the financial experts did not predict such a crash and certainly the mortgage industry was off as well. But you can learn from this event that what goes up can come down and buying a home well under your current income level is better than buying a home at your current income level or slightly above.
Make a new plan. Only after you have confronted the negative emotions, regained control over what you can control, focused on the positive things you still have and learned from your past mistakes can you begin to make a new plan. Trying to make a new plan without the above information will not provide you with the proper perspective. Making a new plan is about looking forward to what is a more realistic expectation for your financial and personal life. You may choose to go back to school to advance your degree or work towards a vocation that you enjoy. You may choose not to buy a home until you can put 50% of the money down, choosing to save for the event. You may choose not to purchase any new or used cars on a payment plan and instead save the money out of cash flow. Whatever the plan, write it down and refer to it regularly to keep your perspective in the proper place.
Use the negative emotions from bankruptcy to form a new way of looking at life. The American Dream does not have to include massive amounts of debt rather the American Dream is about freedom from the tyranny of debt. By choosing to live your life differently, you will begin to see the lessons learned from bankruptcy as a blessing instead of a curse.