Surviving the Emotional Toll of Bankruptcy

Financial stability can’t be achieved without first overcoming feelings of grief, shame, and fear.

Young Couple Dealing with Their Finances
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Additionally, it's important for people to reverse their view of bankruptcy. Goetz says many think of it as something shameful and indicative of failure, when it should be seen as a path to a new beginning.

The experience can also be a learning tool. Goetz says bankruptcy itself shouldn't be a filer's only goal but rather part of a long-term plan to restore financial stability. If people distrust themselves with money after bankruptcy, he recommends they implement financial strategies they weren't using before, such as setting up automated savings.

Before becoming a financial therapist, Snyder worked as a grief counselor to people who lost a loved one. She says grieving the death of a friend or family member is similar to grieving the loss of financial identity. "People who file for bankruptcy need to come to terms with realizing that it's OK to have this moment of honesty and clarity of themselves and that they need help," Snyder says.

[See Get-Out-of-Debt Resolutions for 2013]

Blame is another critical component. Although many people's financial situations are a result of the poor economy and other elements outside their control, Snyder says it's important they take ownership for the things they had control over. The next step in the recovery process: Separating one's net worth from personal worth.

The rest is dependent on how well a person crafts a plan for handling finances from then on. To make things easier, Snyder suggests people set themselves up for small victories by making small, achievable goals. "As they accomplish them, then they can start to feel like they're changing," she says.

Anne Brennan Malec, a licensed clinical psychologist and marriage and family therapist at Symmetry Counseling in Chicago, says true emotional recovery lies in whether people are able to change their financial habits. Says Malec: "This process is so painful, in so many different ways, that if you're going to go through it, you have to learn something through it."