Do what's best for you and take advantage of the Bankruptcy Court's power
Bankruptcy is not a dirty word
If there was one thing I could convey to everyone struggling financially, it would be this: You shouldn't feel guilty about filing for bankruptcy.
People think "bankruptcy" is a dirty word. People think that if they file a bankruptcy case, they've somehow failed morally. It's not, and they haven't.
I may be a little melodramatic here, but when I look at modern America, much of what I see is a dystopia. Our society chews people up and spits them out, but only after it has extracted every hard-earned penny from them. It's a wealth-extraction system that works to the benefit of the powerful: The profits always flow upward. They go to the CEOs of the big banks. They go to the student lenders. They go to the mortgage holders. They go to the super pacs of the tax policy writers. They go to the debt collectors and the credit card companies. In the past few decades, the wealth of the 1% has skyrocketed, while that of average Americans had stagnated.
The individual doesn't have many weapons against these forces. Your wages can be garnished without a court order if you fall behind on your student loans. Dishonest debt consolidators promise to negotiate your debt down, but in the end usually just take your money. You can try to fight debt collection lawsuits, but without an expensive attorney, you get tied up in legal procedure. You can borrow from a retirement account, but that throws your future into jeopardy. When the financial crisis hit, you didn't get a bailout from the federal government, but the big banks did.
Do you think big companies ever feel some kind of moral compunction about taking advantage of the benefits the Bankruptcy Court offers? They may tell the public they're not going to file all the way until the very moment when they do, but in the end it's purely a numbers-based decision. They don't worry that their contact partners will think they're bad people. They don't listen to what their creditors say; they take their own counsel and decide for themselves what is best for them. They don't worry about their credit scores; they know that when they emerge from bankruptcy, they'll actually be more credit-worthy. They don't worry that filing for bankruptcy somehow means they've failed; they know they'll be far more profitable in a future free from bad debt.
You should be more like the big companies in this respect: Don't listen to what your creditors tell you. Your creditors are not your friends. Of course they don't want you to file. They've helped create a whole culture that makes you worry about your credit score and makes you feel guilty about taking advantage of a tool the legal system provides. Don't listen to them; they're not looking out for your best interest.