Healing the shame of loss and debt

Healing the shame of loss and debt

Healing the shame of loss and debt

Recently there has been a lot of coverage about financial scandals. Netflix have just released a docuseries about Bernie Madoff and his billion-dollar Ponzi scheme, which eventually saw Madoff jailed for 150 years (he died in prison in 2021). Meanwhile, in current news, Sam Bankman-Fried, an American cryptocurrency entrepreneur, is under house arrest. In 2022 his company was flying high with a valuation of $32 billion, but he has now been charged with fraud and conspiracy to commit money laundering [1].

Whilst these stories may be intriguing, behind these big names are everyday people reeling from the loss of their money, pensions, and savings. A striking similarity of every story when people lose money or go into debt are the feelings of shame and hopelessness that follow. These can be difficult to deal with and have a profound effect on the individual and their relationships with others [2].

Huge numbers of people are affected by financial loss and debt. If either circumstance applies to you, please take a deep breath, and read on. This article will hopefully reassure you that it is possible to overcome the negative emotions and move on positively.

Firstly, there is a great deal written on the practical steps to take when dealing with financial loss. It is prudent to take direction for this from the experts who have the knowledge and resources to help. This link will take you to Citizen’s Advice which is the most recognized charity for helping with the practical steps in dealing with debt. Here though, we will delve a little more into helping on the emotional side. The loss of money and security can have a big impact on your well-being but the first thing to realise is that you are not alone or unusual.

Debt can happen to anyone

Firstly, it is important to recognise that financial loss and debt can happen to anyone. It is not a sign of failure, weakness [3] or something inherently wrong with you. Loss and debt can happen because of macro-factors, such as significant economic change. We are currently experiencing this in UK with the cost-of-living crisis (although it is happening around the world too [4]).

Micro-factors that can cause debt include [5&6]:

  • physical health issues,
  • mental health issues,
  • low pay,
  • divorce,
  • being a single parent,
  • redundancy.

You may recognise one, or more of these, in your own situation. You are not alone in this and there is help available.

Overpowering emotions and shame

It is common when dealing with financial loss, debt, or associated poverty, for people to report feeling a range of emotions. It does seem however that the one over-riding emotion associated with financial loss and debt is shame. Shame has been referred to by experts as the ‘master emotion’ because of the way it binds to other emotions [2]. As a response to loss and debt this includes: anxiety, anger, guilt, frustration, fear, hopelessness, depression, despair and even suicidal ideation [2 & 7].

When we realise that shame has an evolutionary purpose [8] we can see that it is deep-seated in our society and ourselves. As humans we share the concept of shame with other primates (e.g., apes and monkeys) and it is used as a means of social control [7]. Shame leads to destructive outcomes including social isolation and depression [7]. Shame often becomes circular in nature and becomes deep seated and internalized [2]. This makes the situation feel even more hopeless.

These destructive outcomes are often heightened because the individual feels unable to confide in others. Shame and secrecy go hand in hand, and this is the case, particularly when dealing with an issue that has an air of being taboo about it. In our culture, it is thought impolite or vulgar to discuss money. A recent study of over 1,200 Americans illustrated this. The results showed that respondents would rather talk about politics, religion, health issues, drug addiction and even sex, more so than they would money [9].

So, of course it is difficult to open up about financial loss and debt. The feelings this situation provokes, alongside the cultural taboo, can make an individual feel paralyzing shame. This makes it harder to face those difficult conversations that may need to take place and leads you further into despair.

Best-selling author and expert John Bradshaw writes about shame:

“In order to be healed we must come out of isolation and hiding. This means finding a person, or ideally a group of significant others, whom we are willing to trust.” [2 p.153]

This trust then helps you be honest and open about what has happened and how you feel.

Although it takes some courage to do so, opening up emotionally can help begin the process of changing and healing the situation. You could do this with a trusted friend or family member, a staff member from one of the reputable charities, or with a professional therapist. Sharing your burden achieves two positive steps forward: it is one way of releasing the pressure-valve inside you and it also releases some of the shame too.

Remember, many people who have felt these emotions, just like you are now, have turned their circumstances around – and you can be one of them. It won’t necessarily be quick or easy, but it can be done, and you can do it. Have courage and reach out to those who can help you, so that life can start to improve.

At My Family Psychologist we understand the difficulties and pain that financial difficulties can cause. We can work with you to help with the emotional challenges, which will hopefully help you move forward practically too. Call Luisa for a free and confidential chat on 07801 079555 or email luisa@myfamilypsychologist.com We’ll be happy to help you move forward with life.

By Fiona Ruth


  1. https://www.forbes.com/profile/sam-bankman-fried/?sh=4c84e0d34449
  2. Bradshaw, J. (2005) Healing the Shame That Binds You. Florida: Health Communications, Inc.
  3. https://www.moneymanagement.org/blog/how-to-overcome-feelings-of-shame-about-personal-debt
  4. https://www.business-standard.com/article/international/global-economy-2023-how-countries-are-tackling-the-cost-of-living-crisis-123011200446_1.html
  5. https://www.citizensadvice.org.uk/Global/CitizensAdvice/Debt%20and%20Money%20Publications/The%20Debt%20Effect.pdf
  6. https://www.nortonfinance.co.uk/know-how/debt-management/common-causes-of-debt
  7. Walker, Robert, ‘Constructions of Shame’, The Shame of Poverty(Oxford, 2014; online edn, Oxford Academic, 21 Aug. 2014),  https://doi.org/10.1093/acprof:oso/9780199684823.003.0003, accessed 29 Jan. 2023.
  1. https://bigthink.com/the-present/why-shame-helps-humans-survive/


If you would like to know more about how My Family Psychologist can help, call us on 07801 079555 or email luisa@myfamilypsychologist.com

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