Is it Time to Declare Bankruptcy?

  • February 01, 2017
  • By Caroline Nevin

Starting the new year afresh

This issue of BarTalk includes a focus on the theme of bankruptcy. I am grateful that I don’t have any experience in the financial aspects of this, but with a New Year upon us, it seems a good time to consider the concept in larger context.

Bankruptcy is defined by Webster as “a chance to start fresh by forgiving debts that simply cannot be paid, while offering creditors a chance to obtain some measure of repayment based on the assets available for liquidation.”

What if we applied that concept to those of our debts that have no obvious monetary value? I am talking here about our three biggest “creditors” when it comes to our life and personal energy – Family, Friends and Self. Many of us are overdrawn with more than one of these, and possibly all. So, how do we move forward to leave old debts behind and create new value-adding accounts with each? 

Unfortunately, being smart doesn’t necessarily help you with this one. Being strategic does. 

Let’s start by understanding that personal energy/vitality is a renewable resource and that this is NOT a zero-sum game. Giving energy to one area doesn’t have to mean a loss to others, and in fact some have consistently greater pay-off than what we invest. We need to be constantly aware of which activities help renew energy; which deplete but are either useful or unavoidable; and which serve little purpose but drain us beyond our ability to pay other important creditors. It sounds so simple, but it’s definitely not easy – choosing to move beyond and repair energy bankruptcy is a big decision requiring fierce vigilance, practice and commitment. 

Which brings me to the most important of your creditors – “Self.” Look hard at all aspects of that particular account: what’s the current weighting of your physical, mental, emotional and spiritual investments? They don’t have to be equal, but even a risk-taking portfolio has some balance. Gains in Self inevitably have greater payoffs everywhere, so a good advisor would suggest this single area offers the best value for your post-bankruptcy payment plan.

This leads me to the topic of work. To many of us, work is an essential part of our identity and happiness. We invest a lot in that aspect of our lives, and we gain many good things from it. But work is only one part of us and too often the biggest culprit when it comes to incurring an energy debt. It can be an insatiable creditor, worthy of a tough Trustee (assign yourself!) to dictate the size, scope and timing of its payments. Other creditors have claims too, and it’s your job in a bankruptcy to make sure that all – not just some – receive their due. 

On the topic of Family and Friends, I will say only this: technology is great, but human contact is better, whether telephone (how quaint!), FaceTime/Skype (soon to be quaint) or in-person (never going out of style). Meaningful interpersonal interactions are scientifically proven to positively affect the brain, hormones and overall wellbeing. The same is true for practices that strengthen optimism and gratitude.

We all know that this is a time of global turmoil, cynicism and negativity. At work, at home and online, the swirl of demands on time, energy, thoughts and emotions feel way beyond our control. Against that onslaught, you DO have the power to prioritize your personal energy creditors, figure out what’s possible to give, and gently rebuild positive balances with each. There are lots of resources at CBA and LAP to help you. Become the Trustee of your own life, and make 2017 the year you start fresh!

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Caroline Nevin