What is the Third Costly Emotion That Keeps You In Debt and from Filing Bankruptcy?

Pride.

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.

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