Three Costly Emotions That Keep You In Debt

10 Apr Three Costly Emotions That Keep You In Debt

Emotions, not reasons, keep people from filing bankruptcy and starting fresh.

My fellow bankruptcy lawyer Jay Fleischman has it backwards when he says that for his clients, the decision to file is “purely emotional”.

Emotions stand between debtors and a rational decision that their debts can never be repaid and that bankruptcy is the solution.

Fear, stubbornness, and pride .

Not as sexy as the seven deadly sins, but those three swirling emotions keep my clients mired in debt long after logic says “quit”.


Fear of the unknown probably kept our primitive ancestors alive. In the age of the internet when nothing remains unknown, it’s ironic that fear continues to keep people from filing bankruptcy.

People fear life in a consumer society without credit. They fear being branded as a failure. They fear the judgment of others about whether they are worthy of bankruptcy relief.

Some of this fear is rooted in bad information that circulates; some of it is deliberately planted by those who profit as long as you avoid the bankruptcy remedy.

I’m with Franklin Roosevelt: all we have to fear is fear itself.


It’s hard to knock stubbornness, even when it keeps people doing foolish things. After all, stubbornness, the drive to finish what you started, is often a virtue.

I’m talking about the attitude that says “these are my debts, and by d***n, I’ll get them paid”. Honorable, but not rational. See how long it takes to pay off a modest credit card balance by paying the monthly minimum.

Life is about choices, and the choice to keep chipping away at a Mt.Rushmore of debt means usually that some other, real and important, need goes unmet. The greatest of these neglected choices, in my world, is retirement savings.

Cultivate stubbornness as a virtue, and the questionable choices of the past poison your future as far as the eye can see.


I’m not the kind of person that files bankruptcy, I often hear. Well, what kind of person is it that files bankruptcy? It’s people who’ve gotten sick, even with health insurance; people who’ve divorced; people who’ve lost jobs; and people who got suckered into believing that the marvels of a consumer society were available to everyone.

Bankruptcy is not a moral failing; it’s a legal solution to an economic problem.

Look around at the celebrities and the iconic corporations who have all filed for bankruptcy relief. Do we think that they are lesser people for starting over? Not usually. Walt Disney, one of the more famous debtors, is an American hero.

What Jay terms an emotional decision to file is really exhaustion: when the defensive shield of these corrosive emotions is worn down, and rationality wins out.

How long will you be ruled by these costly emotions?

San Francisco Bay Area Bankruptcy SpecialistCathy Moran helps individuals and small businesses in Silicon Valley with their bankruptcy issues . She can often be found on Google+ and on Consumer Ledger, where she shares information about consumer protection issues and personal finance.

Image courtesy of NASA Goddard.

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Cathy Moran, Esq.

I'm a certified specialist in bankruptcy law (California State Bar Board of Legal Specialization) practicing in the San Francisco Bay Area for more than 30 years. In addition to practicing bankruptcy law, I train new practitioners at Bankruptcy Mastery.
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