Letting Go

Grannum-Skinner’s Plan B makes use of what she’s learned. “Since I knew the ins and outs of opening a business and having it succeed and then fail, I started a consulting firm that helps people start their own businesses.” Grannum-Skinner has relocated to the Baltimore area where she works as director of alumni services for the Center for Urban Families, a nonprofit; she runs the consultancy part-time. She still owns the rights to her franchise so “if I wanted to, I could open up another store, but instead I’m working on building my net worth back up to where it was before.” In all, Grannum-Skinner is optimistic. “I hit bottom, so that means now there’s only room for improvement.”

A Dream Deferred: The Cost of Quitting

When Tisha Grannum-Skinner closed her franchise, she couldn’t pay back her business loans. Compounding matters, she had used a home equity loan on her primary residence and had put up a rental property as collateral. Recognizing that the situation was not salvageable, she filed Chapter 7 bankruptcy, which discharged her loans but forced her to lose her homes. “I had to start over with no credit,” she says. “It was embarrassing.”

Many who declare bankruptcy or lose their homes to foreclosure often grapple with feelings of loss and ­failure, as well as blemished credit. But since the damage is already done, the key now is focusing on the positive. In some cases, “they no longer have a significant debt burden to carry,” says Decatur, Georgia-based licensed psychologist Alduan Tartt. “Their overhead is lower, so they can start saving and rebuilding their credit.” Another bright side (which may not immediately appear beneficial): They’re forced to confront their financial reality. But even financially, it’s not the end of the world, says Dana S. Branham, a Lexington, Kentucky-based financial adviser with investment firm Edward Jones. To reclaim your financial sanity, do the following:

1. Seek professional financial help. A financial adviser or credit counselor can help you see mistakes you made earlier and hold you accountable in the future.
2. Commit to change. “You’ve got to change what you were doing before,” says Branham. “If it was using credit all the time, then stop. If it was not saving money, then start.”
3. Start rebuilding. “Bankruptcy stays on your credit report for seven years, but that doesn’t mean you can’t start re-establishing credit before that,” says Branham. Using a secured credit card, which is backed by cash the cardholder deposits in an account, is one way to do that.

Sharing the Hard Fight

When you give up something you’ve been passionate about, often you must tell others, from family members to friends to colleagues.  Naperville, Illinois-based licensed psychologist Tiffany D. Sanders offers advice on informing different people in your life.
On informing business partners or associates in the endeavor: “Avoid blaming others,” Sanders advises. Take responsibility for what went wrong; then make it clear that you’re ready to move forward. If you’re a business owner laying off employees, be honest about the failure and offer any support you can (Read “Rules of Engagement,” July 2009).

On informing family members: When your decision will affect others, devise a plan for telling them; then let them know exactly what they can expect as a result of your actions. “Tell them, for example, ‘we might have to scale back expenses, or sell the house,’” says Sanders. Also, be open to their suggestions since the outcome affects all involved.

On informing everyone else–or not: Share the experience only with those whom you know truly support you and want to see you succeed. If others ask, “hold your head up high and respond confidently that you’ve hit a setback. It’s no more of a setback than anyone else would hit in their life,” Sanders points out. “Let them know in a very diplomatic way that you don’t want to discuss it further, then simply leave the conversation there.”