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How Can Bankruptcy Affect Your Family?

How Can Bankruptcy Affect Your Family?

Declaring bankruptcy can have many significant negative implications for both the person filing bankruptcy as well as loved ones. The stress on the family resulting from bankruptcy can often result in divorce or, at a minimum, extreme resentment and other marital difficulties. While many parents try to shield their children from the difficulties of life, bankruptcy and all the financial difficulties leading up to it can have a lasting impact for many years. The key to getting the family through troubling financial times is to be open and honest so everyone can pull together and get through the difficult road ahead.

Personal bankruptcy doesn't spring from nothing and is often a direct result of losing employment or contracting a severe medical condition. In fact, bankruptcy might be the last nail in the coffin for a family depending on the circumstances which got them to that point. What were the issues that directly led to the bankruptcy and are they something which can be realistically overcome? In these types of cases bankruptcy may actually be a release from overwhelming debt as it will allow the family to refocus on getting back on their feet without creditors breathing down their neck. Open and honest communication however must start early because doing it while filing for bankruptcy will already be too late.

When one or both parents lose a job or suffers a severe medical condition such as cancer or stroke it is sometimes inevitable that bankruptcy will be forthcoming. These types of scenarios allow parents the opportunity to speak with her children in a mature manner by explaining their current situation. All members of the family will normally have to make sacrifices and changes to their daily routine to accommodate the new situation. An open and honest family will often pull together through tough times when working towards a common goal. As mentioned earlier however this cannot be done at the bankruptcy stage and should be a pattern of behavior over many years.

Not all bankruptcies have the opportunity to positively affect a family. Depending on the circumstances, a bankruptcy may have the opposite effect on a family resulting in divorce and estrangement. If one of the parents is an alcoholic or gambling addict which results in blowing the family's life savings or getting fired from a job then bankruptcy will be the least of their issues. In these types of scenarios it is unlikely that a family will be able to stay together if the offending family member doesn't get their act together. Again, bankruptcy is a direct result of many factors leading up to a final resolution. Bankruptcy is not the result in and of itself minus external catalysts. More than likely bankruptcy will just be one more result of bad judgment and will often be followed by divorce.

It is important to remember that whether it is bankruptcy or a personal tragedy or some other trying situation communication is key. If family members are able to effectively communicate what currently is going on and what that will mean for them then they can also discuss possible solutions. The question of how can bankruptcy affect your family would be more accurately answered by stating how would your family overcome any obstacle regardless of what it is? Families live or die by the strength of their bonds and their ability to pull together in times of need. Whether or not your family has that ability depends a lot on trust and honesty. If those resources are in abundant supply then regardless of a bankruptcy or what may have caused it your family will be able to move on and come out stronger on the other end.

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