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Thanks for your question. Cutting off parents who are still keeping "the cycle of pain" going is indeed a better option than trying to put up with that in order to have a relationship with them. The behavior from your family that you describe would have to be confronted and stopped (just with you, not with anyone else) before you could even attempt to reconcile.
I wouldn't blame you for thinking that's impossible. It takes a long term effort, uncovering the reasons for their behavior, and learning how to confront them without creating the usual fight/fight/blaming/denial etc.
With more dysfunctional families a therapist's assistance is usually required to do this successfully. I wouldn't recommend trying this without that help. Unfortunately, therapists who know how to help patients in this way are very hard to find.
I see severing contact with parents as still problematic because we all carry our parents around with us in our heads, and we often continue to conform to dysfunctional family rules. However, if someone is not engaging in repetitive self destructive or self sabotaging behavior, is relatively satisfied with their work, love and play life, and is not passing dysfunction issues on to their kids, then seeking out this sort of help is far less necessary.
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