Talking To Your Family About Bankruptcy

So you’ve come to a point in your financial life where debt is overwhelming and the only viable way out that you can see is bankruptcy–that’s a perfectly valid path forward. Many people have found much-needed relief from filing for chapter 7 or chapter 13 bankruptcy in Ohio. Despite all the benefits and opportunity for true credit repair and financial recovery, many people struggle with the stigma of bankruptcy and the negative emotions and perceptions it engenders–it can take a real toll on mental health. But there’s no need to go it alone. Your friendly Ohio bankruptcy lawyers at Hausen Law are here to help, with advice on how to talk to your family when you’re facing bankruptcy. Let’s get into it.

The Bankruptcy Conversation

Many people feel embarrassed, ashamed, or anxious about discussing even minor financial problems. But bankruptcy takes the stress and shame to a whole new level. This is because bankruptcy often carries associations with common misconceptions and undeserved stigma. But the truth of the matter is that filing for bankruptcy in Ohio is a legitimate way to escape weighty debt and start fresh. When life puts you down, bankruptcy allows you to rise again. But most people and many common reasons for filing bankruptcy don’t live in a vacuum–family members and friends may find out or even be involved. Open communication can help to reduce stress and strengthen family support during what can be a difficult and stressful time. 

All of that said, actually having the bankruptcy conversation likely won’t be easy. Unless someone has gone through it themselves, there is likely to be a level of discomfort in talking about financial struggles. The emotional toll of financial difficulties can bring on fear, guilt, frustration, shame and plenty of stress. But honesty and understanding will go far to make it easier for everyone involved. For instance, most folks aren’t filing for bankruptcy because they lived it up and maxed out all their credit cards. Instead, unpredictable and sometimes unavoidable life circumstances like medical bills, job loss, divorce, and unexpected emergencies–sometimes more than one at a time–are typically at fault. And truthfully, the aim shouldn’t be to lay blame, but to understand the situation and find a positive path forward.

When you decide to have a conversation with your family about filing for bankruptcy, the goals should be simple:

• Reduce uncertainty
• Prevent misunderstandings
• Help everyone prepare for changes
• Build a support system

Obviously you’d want to lay out the details with a spouse or partner, since a bankruptcy could directly impact their financial situation. That’s especially true if you share joint financial accounts. Focus on the benefits of filing, and share that bankruptcy can help to protect your joint assets, your future income, your retirement, and your legacy. Bankruptcy gets rid of or at least reduces debt so that you can focus on a more financially stable future, together. A bankruptcy in the family will also affect monthly household budgeting and future planning for trips or larger purchases and investments. You can certainly get to where you want to be with some hard work and determination, but for the present, your focus will be on eliminating debt. 

Should you include children in your bankruptcy discussions? It depends–on their age, and their ability to comprehend the situation. Above all else, you want to reassure children that the family is still stable and secure. If you have young kids at home, this is especially important. You may share that you’re going to have to cut back on certain expenses, but always with a reassurance that you’ll still have fun together and that they’re loved and safe. 

If adult family members outside of your immediate family have served as co-signers on debts that will be involved in your bankruptcy, then they will find out one way or another, but it may be easier to handle coming from you personally. Other family members may be able to offer assistance during what can be a stressful time–you won’t know who is ready to support you and your immediate family until you open up and have a discussion. 

Since we already established that this conversation could be difficult, it’s a good idea to choose a quiet, calm place and a private setting, at a time that isn’t already stressful or inconvenient. Make sure there’s enough leeway in everyone’s schedule to be able to have an open discussion, and allow time for everyone to ask questions. Just be sure to keep things simple and to the point–not everyone needs to know every detail. This is the perfect time to allay fears and reassure your family members that you’re all in this together and that your goal is teamwork and progress. It won’t always be easy, and there may be noticeable financial adjustments, but you’ll all still have each other and you’ll find ways to enjoy time spent together. Children may especially be worried about losing their home and stability, as bankruptcies are often portrayed in popular culture as a major upheaval, but you can let them know that filing for bankruptcy in Ohio means that you can keep your home and some other key assets. More than anything else, focus on hope and the ability to rebuild credit and dig out from under debt. In the end, this is a good thing.

Focus On The Future

The end goal of bankruptcy is to take care of debt and set you up for a better financial future than what you left behind. So as part of your family chat you can include future financial goals, suggest budgeting improvements, highlight the benefits of debt relief, and outline the steps you’re taking to rebuild and repair your credit. Try to shift the focus of the conversation from a current crisis to a future recovery. Share how bankruptcy can help you to make a fresh start, and keep focused on solutions, like an end to creditor harassment, debt relief, reduced financial burden, and a positive path forward.

At the same time, there are some key things not to do. These include hiding important information from family members, assigning blame to others, making promises about your future finances that you may not be able to guarantee, and letting emotions take over. These are all ways to derail what could otherwise be a productive and supportive discussion. 

Seek Professional Guidance from An Ohio Bankruptcy Lawyer

To ensure that your bankruptcy proceeding is done correctly and in your best interest, it is non-negotiable that you should work with a bankruptcy attorney. They can fully explain available options in easy-to-understand terms. They can answer your legal and bankruptcy questions, and give you real-life examples of how a bankruptcy may affect your family’s finances. Your chapter 13 or chapter 7 bankruptcy lawyer has the needed expertise and experience to allay your worst fears and shed light on the reality of your situation. They can also advocate for your rights and ensure that you are fairly represented in the proceedings. This isn’t a path best walked alone–with the help of your family, friends, bankruptcy attorney, and the legal provision of bankruptcy, you can be set up for a brighter financial future.

Filing Bankruptcy in Ohio? We’re Your Ohio Bankruptcy Lawyer

At Hausen Law, we understand that with the right information and support, bankruptcy can be your first step toward financial recovery, not the end of the story. It can be stressful and shameful to discuss your bankruptcy with your family, but once you’ve worked up the courage, you will likely find it isn’t as bad as you imagined. Everyone will be on the same page and you’re more likely to gain support–you don’t have to suffer through bankruptcy alone, and the weight of secrecy is relieved. 

If you are staring down mounting debt and neverending bills, bankruptcy could be your solution. Contact our team to schedule a confidential consultation and discuss your bankruptcy options with an experienced Ohio bankruptcy lawyer. Hausen Law is happy to serve all of Northeast Ohio, including the Akron, Canton, Cleveland, Wooster, Dover/New Philadelphia, and Youngstown communities. Contact us today to set up a free consultation or to inquire about our credit counseling and credit repair programs.