The Emotional Side of Bankruptcy

Although unfortunate, bankruptcy is a reality for those of us living in the United States. In fact, filing for bankruptcy has been at an all time high as a result of the economic crisis that occurred in 2008. While there is a lot of research and information on the Internet about bankruptcy, an often neglected aspect deals with the emotional toll associated with filing for bankruptcy. In fact, not many people realize that numerous psychological effects may stem from bankruptcy.

It is no illusion that modern societies today emphasize notions of money and materialism to an extent that affects the core of each member of society. As Bradley Klontz, a clinical psychologist says, many individuals, especially men, put a lot of emphasis on money. This can make bankruptcy a severe emotional issue for the debtor, because according to Klontz, many of us link our self-worth to our net-worth. Filing for bankruptcy, therefore, is likely to have a negative effect on our self-esteem, causing anxiety, depression, a sense of loss and failure and even severe stress. For many, a dire financial situation can mean a loss of identity and confidence.

That is why it is important for anyone who is considering filing for bankruptcy to know that while bankruptcy might be something you would rather avoid, you are not the first nor will you be the last person to file for bankruptcy. In addition, a wide array of emotional support and counseling exists to make filing for bankruptcy a smoother journey and one that will not wreak havoc on your psyche.

Insurance Sales: Personal Stories and Examples

Personal Examples Help Your Prospects Understand the Need

I think most insurance agents and financial advisors spend too much time and effort illustrating projections, and explaining policy features.

Because that’s not what really “sells”.

The most compelling reason for “buying” insurance coverage is neither the features nor the provisions of the coverage. The reason most people buy insurance of any kind, is to prevent a “bad” event – like a traffic accident or a heart attack – from becoming a “worse” event – like losing their income or their assets.

People buy insurance to protect their financial security from the “cost” of bad events.

That’s why it’s so important (critically important) to “sell the need” or sell the potential “pain” of financial loss and the practical consequences of that loss.

And one of the best ways to do that is with “stories” that provide examples of such losses, and the consequences of those loses – with or without insurance coverage.

Every journalist knows that people are engaged and intrigued by “stories”- even short stories or anecdotes – especially what they call “human interest” stories. Because people relate to stories about other people – especially those in similar situations to themselves.

And it’s been proven that people read or listen to a well told story much more carefully than they do to any other form of information. More importantly, people learn better when told a “story” in the form of an example.

That’s why stories can be one of your most effective “selling” techniques…

And why sharing personal examples with your clients and prospects is one of the best ways to establish your sincerity and credibility – while influencing their decision to buy.

Here are a few of the “stories” I have personally used:

– My son in law (the eldest of four children) lost his father to ALS when he was 14, and helped his mother raise 3 younger siblings – without life insurance.

– One of my high school buddies died of cancer when we were only 31 – leaving a young widow and 2 very young children – but with enough life insurance to pay off their home and leave them without any debts.

– I once had a business partner who collapsed from a massive heart attack during his regular morning jog – before he had completed the medical exam for key man insurance. It cost our company over a million dollars – which ultimately resulted in bankruptcy and dissolution.

– Another high school friend was diagnosed with Multiple Sclerosis in his early forties – but without disability insurance. He struggled for as long as he could, but ultimately he could no longer work – first as a restaurateur, then as a realtor, and finally as a mortgage broker. And because his illness got progressively worse, even when he was working, he couldn’t earn enough to raise three children – even with his wife’s income as the office manager for a law firm.

– One of my best childhood friends was a manic depressive (and off his medications) when he jumped to his death from the Golden Gate Bridge, when he was only 35. He left one child and a pregnant wife – again, without life insurance. Of course, these are only a few abbreviated examples of my own “stories” – but do you see how they were of interest to you, and got you thinking of your own experiences?

That’s the power of examples in the form of “story telling”.

Some of the most successful insurance sales professionals use this technique with every client or prospect – because it’s honest, it’s engaging, it’s compelling, and it works.

Debt Settlement – The Gory Details of My Personal Story

You are about to read a very personal story about me. I am a happily married, 40 year-old father of two precious little kids. I live in Los Angeles, California and my name is Jonathan Grossman. This sounds like an introduction to an AA meeting. In some ways it is!

Back in 2004, I was making a great living as a TV composer and enjoying the high life with my wife. By 2006, we had our first child and I was unemployed, living off savings and hoping things would turn around. By 2009, I had 2 kids, went through all of my savings and managed to accumulate $130,000 in debt. Things were not getting better and I had to make a move.

This story is a lot of things. First off, it’s true. But even more than that, it is a brutal examination of the American economy from the point of view of the consumer. In many ways, I am the typical Hollywood story combined with the typical real estate boom home buyer. I was irresponsible and wreck-less and the financial climate was my gracious enabler.

This story will tell the tale of how I got myself into this financial mess, and I how I chose to get myself out of it. For the record, I take 100% responsibility for creating all of this debt. I am not for a second blaming anyone but myself!

The story has a horrific beginning, but a great ending. Without further delay, here are some details.

In July 2009 this is where I stood:

* $130,000 in unsecured debt.

$104,000 in unsecured personal lines of credit
$26,000 in credit card debt

* Owned, or rather “owed”, my home which was fully financed at $880,000 and it was underwater.

If I sold it, I wouldn’t even be able to pay off my mortgage.

* Monthly bills: $18,000
* Monthly net income: $12,500

Monthly deficit: $6,500

* I was drawing from my personal lines of credit to help pay the bills each month.
* I was drawing from those very same lines of credit to make the minimum payments on them each month.
* I had 2-3 more months before the credit ran out…MAXIMUM DEBT VELOCITY.

HERE WERE MY FEARS!

* Foreclose on my house.
* Feel humiliated with my family and friends.
* Declare bankruptcy.
* Look into the sweet little eyes of my 4 year old son and explain why we have to move from our home and make new friends
* Admit to my wife that I had let the family down.
* Admit to myself that I was a failure.

HOW DID I LET IT GET THIS BAD

NYC: National Debt Clock

I’ll tell you.

* I didn’t save enough for a rainy day.
* I kept hoping things would turn around.
* I ignored the obvious downward spiral.
* Once I started to fall into the pit, I passed the threshold of caring.

I LET MYSELF GO DEEPER BY SAYING “I AM ALREADY $100,000 IN DEBT. WHAT’S ANOTHER $5,000 AT THIS POINT”

Here’s my story of how I got into $130,000 in debt and how I am getting myself out of it. I am not yet done by the way.

BIG DISCLAIMER!!!!

Let me be clear up front. I am not a debt settlement counselor. I do not work for any of the debt settlement companies. I do not profess to be an expert or in any way imply that you are guaranteed to have the same results I am having.

Things that can or will happen if you choose Debt Settlement include:

* A lot of HARD WORK.
* A lot of time, focus and resilience.
* Rhino skin and tenacity.
* You MIGHT be threatened with law suits.
* You will have creditors calling you all the time.
* Your credit will suffer.
* You MIGHT have to pay taxes on the amount of debt that the bank forgives.

It is NOT easy. As I just said, you need rhino skin and tenacity. But, if you are willing to do your homework, you may find that debt settlement is the right road for you.