Bankruptcy Filing: Something to Feel Guilty for, or a Responsible Step Forward?

Bankruptcy filers often feel guilty or ashamed that they have gotten themselves into a position where they need to avail themselves of the bankruptcy laws. This guilt arises despite very concrete reasons for having the opposite feelings.

Even after it is explained to people that the credit card companies whose debts they are trying to discharge will probably survive despite that person's bankruptcy case, their morals still tell them it's still not right.

Even when they learn that Congress created the bankruptcy laws so that, on the whole, both sides benefit (debtors, creditors and society as a whole), it still doesn't seem to curb the guilt.

However, when they hear one of my favorite stories, about how some of the most brilliant and successful people in our history filed bankruptcy, their ears perk up. One such historical figures is Thomas Jefferson.

Thomas Jefferson was, of course, the third president of the United States. He was a statesman, diplomat, architect, author, inventor and farmer. He is uniformly regarded as a genius and perhaps the smartest of all United States presidents. He wrote the Declaration of Independence and gave vision to this country as one of its founding forefathers and leaders.

Why do I bring up Mr. Jefferson? Because he was almost constantly in debt. Not just medium or small-sized debt, but really large debt. Mr. Jefferson filed several bankruptcies in his lifetime; and his debt was huge in comparison to most individuals' bankruptcies today.

The point is: Filing bankruptcy is nothing to be ashamed of. If a person with Mr. Jefferson's credentials, aptitude and intelligence can repeatedly get himself into situations that require bankruptcy to alleviate, then it is certainly no negative reflection on us mere mortals who need to file.

The bankruptcy laws are here to serve a definite purpose that benefits everyone on the whole. Obviously it is still important to be responsible for the debts one incurs, but filing a bankruptcy is an act of responsibility. It puts you in a position to move forward, to become productive once again, provides closure, and pays your creditors from your non-exempt assets in a Chapter 7 case (or by other means if the court so approves in a Chapter 13 or chapter 11 context).

It is important to explore bankruptcy as an option instead of struggling for years to no avail. There are many factors to consider before filing a bankruptcy, but one of them should not be a guilty conscience.