When Your Family Faces Bankruptcy

Most people try to be as financially responsible as possible, yet bankruptcy happens to the best of us—especially in our slowly recovering economy. If bankruptcy hits home for you, it can leave you feeling frightened, angry, and helpless. Knowing how to cope can help the process seem far less daunting.

Turn to Faith

As with any trial, bankruptcy is an opportunity to grow in faith. Pray often, pouring out your feelings to God. Tell Him what’s going through your heart and mind, even if you’re angry with Him. Ask Him how to handle the situation. Delve into Scripture and seek godly counsel from a clergy member. Stay active in church as much as possible.

Learn the Basics

Get in touch with a reputable financial advisor right away, and bring all your questions to the table. Ask if you should file under Chapter 7 or Chapter 13 and what the differences are. Additionally, ask if any debts can be consolidated, deferred, or cancelled. If yes, ask how the financial advisor would have you handle these.

Reassure Your Family

Your family (especially children) will have questions. Explain what bankruptcy does and doesn’t mean. For example, your family can still keep personal property and pets. Mom and Dad will still provide for the family. If you will lose your house, make a plan for where you’ll go, and share it with your family early.

Get Out Fast

Again, speak to your financial advisor about a plan to help you get out of bankruptcy. Request guidance on how much you should save and spend as well as how long you can expect to be on a certain financial plan. Once you’re out of bankruptcy, stay in touch with your advisors so you can avoid it in the future.