Bankruptcy

The Five Stages of Grief in Bankruptcy Cases

By Joseph McDaniel, Esq.

For instance, when a "good deal" on a house has long since faded away with eroding home prices, and a job has evaporated along with the economic depression that grips our country, many folks will just stay trapped in denial (bankruptcy lawyers sometimes call it "deer in the headlights syndrome") and keep making patently excessive payments that they can't afford out of the 401(k) that they shouldn't be spending until it's all gone.

Denial can outlast savings.

And MANY folks have generalized, unfocused anger toward the world which has cheated them, and that manifests itself in pretty obvious ways. In some ways that's the easiest thing for a bankruptcy attorney in Phoenix, Arizona (or Mesa or Scottsdale or Tempe or Chandler; grief is similar wherever you go)to address.

Anger can often be defused by asking questions, and it really needs to be defused in a bankruptcy related discussion, because if somebody is angry enough, they can't think straight. That's because the part of the brain that controls anger ("the lizard brain") is primitive compared to the parts of the brain that can operate a pocket calculator. And if you can bore somebody adequately, so they forget about their anger, and then ask them questions that have numbers as the answers, the anger can often be worked around.

If not, they have to go away and have thoughts and feelings, because a bankruptcy case, whether it's in Phoenix, or Scottsdale, or Mesa or Tempe, is a collaborative effort between lawyer and client; if the client can't help, the lawyer can't do it all, because there are a bundle of decision points that the client has to make independently.

Bargaining shows up as part of the process of grieving for the loss of plans, dreams, and beanie babies, but it tends to be short-lived; when debtors figure out that many creditors are utterly unreasonable, stupid, disorganized, and irrational themselves, that reduces their interest in bargaining of any sort.

And that makes sense, because the 80/20 rule applies in doing deals with creditors, and if 20 per cent of them are the south end of horses going north, it makes doing deals very difficult.

Depression is the most common and most difficult of the symptoms that show up prior to the ability to accept the new insolvent reality.

Here's the nice thing about depression: nothing.

But if there were, it would be that at some point, as long as it's ordinary old situational depression, the debtor will wake up and smell the coffee, and understand that having one plan go awry isn't the same as pancreatic cancer, and the debtor then smiles, and can move on into acceptance, and having accepted reality, can deal with reality.

And acceptance makes everything easier. When a potential debtor has had adequate time to understand that things have changed, and it's not his fault that the market for everything tanked, and that the only practical outcome for her now is a bankruptcy, whether it's a Chapter 7, Chapter 13, Chapter 11 or Chapter 12, there is a substantial easing of the suffering involved in the process.

Sadly, some folks have immediate, pressing problems that must be addressed NOW, no matter what their emotions are doing (trustee's sales that may have an impact on whether the debtor can pass the means test, or lawsuits that will result in garnishments and liens on property and debtor's exams), and managing those emotions during the sometimes extended period prior to filing can be, well, interesting.

Sometimes.

NOTHING HERE CONSTITUTES LEGAL ADVICE RE A CHAPTER 7, CHAPTER 13, CHAPTER 11, OR CHAPTER 12. FIND AN ARIZONA BANKRUPTCY LAWYER WHO IS BOARD CERTIFIED IN BANKRUPTCY LAW, AV RATED, AVVO 10 RATED, ON SUPERLAWYERS, OR JUST VERY EXPERIENCED AND A FORMER CHAIR OF SOME BANKRUPTCY SECTION OR COMMITTEE. NOTHING HERE MAY BE USED AS LEGAL ADVICE IN CONNECTION WITH ANY BANKRUPTCY, WHETHER THAT BANKRUPTCY IS IN PHOENIX, GLENDALE, TEMPE, MESA, SCOTTSDALE, OR ANYWHERE ELSE.

Full post as published by Arizona Bankruptcy Attorney Blog on May 03, 2010 (boomark / email).