Breaking the bankruptcy and insolvency stigma

Breaking stigmas means ridding ourselves of our assumptions, generalizations, and broad-brush statements that are harmful to individuals and groups. It means helping our young people grow up in a world that is less judgmental and more tolerant of differences and even mistakes.

We have seen strong movements and positive progress in breaking stigmas that have plagued society for so long, especially stigmas surrounding mental health. We still have a long way to go, of course, but there are reasons for optimism.

Given how connected our finances and our mental health are, it’s odd we don’t talk more about breaking stigmas surrounding finance. Perhaps now’s the time to change that.

The stigmas we put on ourselves

The Money and Mental Health Policy Institute, based in the UK, published research in March of 2019 which concluded that 46 percent of all individuals facing debt problems also reported facing mental health problems. Whether the mental health problems were caused by the financial difficulties or vice versa, there’s no denying there is a strong link between the two.

Unfortunately, we are often our own harshest critics. The stress and anxiety brought on by excessive debt may lead you to convince yourself of things that simply aren’t true: that you’re a failure, that you’re alone in your experience, that you’re not worthy of help, or that your situation is beyond helping.

Although you may not recognize it in the moment, these are stigmas. And just like any other harmful stigma, you are much better off without it; we need to do the hard thing and analyze individual circumstances, rather than the easy thing which is to make generalizations and assumptions.

We’ve been through a lot, including a devastating pandemic and associated job losses, in the last two years. Go easy on yourself, and seek help if you need it.

The stigmas others put on us

Even if you’ve avoided judging yourself too harshly, there’s no guarantee that the people around you won’t believe or perpetuate stigmas. It’s common for individuals who are struggling financially to worry about what others will think of them. These fears are normal.

Nobody can completely shield you from the sometimes harsh judgments of others, but we at MNP Debt can provide some context and data to ease your mind.

MNP’s Consumer Debt Index released in April 2021 revealed that more than half of Canadians — 53 percent — have $200 per month or less standing between them and insolvency. This would indicate that the amount of people in your social circle who either have, should, or will soon seek professional help managing their debt is probably larger than you think.

Don’t assume that others are in a better place. Our recent consumer index results indicate that many of us are feeling financial pressures.

Licensed Insolvency Trustees (LIT) and other debt professionals also hold high standards of confidentiality. Aside from the people you share debt or bank accounts with, and the people you owe money to, nobody needs to know that you’re seeking professional help to manage your credit.

In fact, the consequences of not seeking help — including asset seizures, regular phone calls from creditors, or deteriorating health — are often far more noticeable to your peers.

You can be honest about your situation without disclosing every detail of it. No person who truly cares about you will think less of you or respond unkindly if you simply tell them “Sorry, we just can’t make that work in our budget right now.”

The first step to reach out for assistance can be difficult, but understand that an LIT will provide a safe and judgment-free space to talk about debt issues and find solutions. The consultation is free; no charge and no judgment. 

Help is just a call away

MNP Debt has the tools and experience to help brighten your financial future. Together we’ll find the solution that best fits your situation, whether it is a Bankruptcy, Consumer Proposal or other options.