Life After Bankruptcy

If you think bankruptcy could be looming for you as well, read on to discover what you can expect and what to watch out for after filing for personal bankruptcy.

Filed - Now What?

For the individuals who have declared bankruptcy, the recovery process is long and difficult. The first step comes when you and your bankruptcy attorney meet with your creditors to inform them of the bankruptcy, at which time any non-exempt assets that you have must be liquidated. (To see a full list of asset exemptions, check out DaveRamsey.com.) You will be allowed to keep your car, your furniture, and your personal belongings up to a certain value, but any non-exempt liquid assets such as cash must be turned over to the bankruptcy trustee. But liquidating your assets is only the first of many issues that must be dealt with as the consequences of your bankruptcy begin to unfold.

Filing bankruptcy can, without a doubt, stir up many negative emotions. A debtor's sense of self, identity, and worth are often closely tied to their financial circumstances. Loss of money can thus be experienced as a loss of identity, self-esteem, and confidence.

We live in a society in which image is important and lifestyle is seemingly defined by possessions. Money can be viewed as a powerful currency not only in a purely economic sense but also in relationships, and thus a real or perceived loss of interpersonal power can ensue when bankruptcy is filed.

Understanding these emotions can help disentangle the practical realities of money from the possibly destructive or limiting emotional responses to a bankruptcy filing.