Sam Brotman, JD, LLM, MBA December 16, 2013 4 min read

Psychological Effect of IRS Collections


Sam Brotman, JD, LLM, MBA

Owner and Director of Legal
Brotman Law

Achieving financial stability should be a lifelong goal. Developing financial plans and meeting long-term objectives is a lengthy process that requires patience, discipline, and endurance. What happens when your plans are disturbed because of past and present financial issues that threaten to destroy your future? Bankruptcy is one of those financial problems that take into consideration your past, your present, and your future.

What you have done with money up to this point will dictate, in essence, how money will be distributed from the income you bring in. Now you must develop a debt repayment plan and lose a significant percentage of your income to repaying old debts. Now you are also tasked with the goal of developing a debt repayment plan. The process of repaying debt, experiencing wage garnishment, and entering bankruptcy can have a psychological effect that may prove just as long lasting as the financial problems you have at the moment.

In a U.S. News article, Daniel Bortz discusses the idea of surviving the emotional toll that bankruptcy brings. Filing for bankruptcy has wide-reaching effects because it can cause stress on relationships and be traumatic for all parties involved. “The focus is often on the financial steps—compiling a comprehensive list of debts, hiring an attorney, seeing the case through—but neglecting the emotional aspect can have long-term consequences. Many people who turn to bankruptcy have juggled their debt for so long that they’re emotionally exhausted by the time they’re read to file” (, Bortz, “Surviving the Emotional Toll of Bankruptcy,” 8/17/2013). Because the problem is more internal, the self-esteem takes a greater hit than the finances. It is truly embarrassing to deal with financial problems because they reveal much about how we handle money—our belief systems, habits, and lack of knowledge in the area.

A money crisis is taxing on the mental state. This is especially significant for filers of bankruptcy. “Filers may be concerned they’ve accumulated so much debt that bankruptcy will not offer relief, worry what their family thinks about the situation, or assume their credit score will be permanently destroyed. Such misguided beliefs build anxiety and fear, and only make the process more taxing” (“Surviving the Emotional Toll of Bankruptcy”). Bankruptcy is still a viable option, but the judgments and disapproving looks of family members may create such a black mark in the mind that it affects you psychologically.

To navigate through this grief, just remember that a bankruptcy stays on the credit report for 10 years. Do not look at this in terms of length of time. Instead, look at it in terms of 10 years of good financial planning as a tool for overcoming this major hurdle in your life.

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"Sam is a wonderful, results-oriented and extremely knowledgeable and talented attorney, who really has 'heart' in working on behalf of his clients, and explains options in a straightforward, respectful manner. He has assisted us with great outcomes which have added to our quality of life. I would not hesitate to recommend Sam for his services as he is an ethical, personable and expert attorney in his field. You will likely not be disappointed with Sam's work ethic, approach and his efforts."

-Aileen Dwight, Licensed Clinical Social Worker & Psychotherapist

Last updated: June 28, 2022

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Sam Brotman, JD, LLM, MBA

Owner and Director of Legal
Brotman Law



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