Personal Bankruptcy Options

Personal bankruptcy options can be confusing. Is this the right choice for you as a stay at home mom? Learn about the types of bankruptcy and how to file personal bankruptcy for those in debt with no way out.

If you are dealing with a huge amount of debt and your finances seem beyond repair, you may wonder what personal bankruptcy options are available to you.

Of course, bankruptcy is a huge move that you need to consider very carefully.

It has long term consequences that should not be considered lightly. Some people have the idea that bankruptcy is a quick way to fix all their financial problems, and this is not the case.

Learning how to file personal bankruptcy and then going through with it will have an impact that can last for 7-10 years. It also can bring with it feelings of guilt, especially as a stay at home mom, since you are not making good on your financial commitments.

After all, you probably are wondering how this is going to influence your children.

While you may not like the idea of having to go the bankruptcy route, there are times when it is the only option available. Maybe you are dealing with unemployment, medical bills that have overwhelmed you, or just some bad mistakes you have made financially over the years.

If you think this may be the right move for you, it’s important to take a closer look at your personal bankruptcy options and learn how to file personal bankruptcy.

Important Bankruptcy Facts You Need to Know

When you are considering the personal bankruptcy options that are available to you, you need to have the facts first. It’s important that you not only learn how to file personal bankruptcy, but you also need to know how it can affect your life, how it will affect credit, and many other important facts.

Here is a look at a few of the important facts you need to know before deciding which personal bankruptcy options may be right for you.

Fact #1 – There is a Limit to the Times You Can File Bankruptcy
Some people learn how to file personal bankruptcy and think that they have the option of filing as many times as they need to. The fact is that you are limited to the times that you can file for bankruptcy. This is really designed to be a one time thing, although different states may allow you to file 2-3 times. There is usually time period that must be between filings as well.

Fact #2 – Filing Bankruptcy Won’t Improve Your Credit
With being a stay at home mom, when you’re looking at your personal bankruptcy options, don’t fall for the myth that your credit is going to improve when you take this step. You won’t improve your credit when you file for bankruptcy.

Although there have been few cases where credit has improved after a bankruptcy, in most cases you will find that your credit drops, although it won’t necessarily stay that low forever.

Sometimes you’ll find that after a few years your credit will go up. One thing to remember is that some lenders are happy to deal with people that do have bad credit, so it doesn’t mean that you can’t purchase or refinance a home if you have gone through bankruptcy.

Fact #3 – You Can’t Keep Big Ticket Items You Owe On
While being a stay at home mom it’s a nice idea to think that you can file for bankruptcy, discharge loans, and still keep the items you owe on, this is not the case. Once you learn how to file personal bankruptcy and you go through the process, the items that you owe on are going to be repossessed.

This includes your car, a boat, a home, and other big ticket items. However, there are some cases where you can make arrangements to not include these debts in your bankruptcy and companies may agree to allow you to keep making your payments to keep your car or another item like your home.

Understanding the Two Types of Bankruptcy

If you have decided that you do want to learn how to file personal bankruptcy and you’re ready to go through with it, you need to understand the personal bankruptcy options you have. You can consider two different options if you’ve decided to file.

Chapter 13 Bankruptcy
One of the options available to you if you are planning to file bankruptcy is Chapter 13 bankruptcy. This type of bankruptcy is going to require that you have income coming in and you’ll need to have a very strict budget in place.

A trustee administers this plan to arrange for payments on debts that are outstanding. You have a specific time period to pay on the debts that are outstanding. After this time of repayment is over, the rest of the debt you still have will be discharged.

When you are making payments on your current debts, you’ll find that the payments are lower than you were paying before and you won’t end up paying the total amount that you owe, which can help you out financially. During this time your wages are garnished and the payments go to a trustee who distributes the money among your creditors.

You’ll continue this for 3-5 years, depending on the time decided upon by the judge. Going with these personal bankruptcy options allows you to pay off some of your debt, keep things you own, and it doesn’t cause as much credit damage.

Chapter 7 Bankruptcy
Another of the personal bankruptcy options is to go with Chapter 7 bankruptcy. With this type of bankruptcy you can discharge most of the debts you have. However, any assets that you have are going to be liquidated.

This money will then be applied to your debts. There are some liens that you can have exempted from your bankruptcy as well, such as your home loan or a car loan.

When you decide to learn how to file personal bankruptcy, choosing the Chapter 7 option, you’ll have to list all your assets for the court. This includes everything of value that you have. In some cases, some personal property may be exempted, such as the furniture you have in your home.

If you have assets worth a lot of money, such as a $10,000 engagement ring, you’ll probably end up giving it up to help pay off the debts you have incurred. With Chapter 7 bankruptcy, you can be free of debts immediately, but this option may result in more negative effects on your credit.

Choosing bankruptcy is never a great option and it should only be seen as a last resort. You will find that there are many other options for debt relief that you can consider before taking a look at the personal bankruptcy options available to you while being a stay at home mom.

Money Saving Resources

Use the following resources to help you on your path towards becoming debt free.

1. More pages on

How to Get Out of Debt

Financial Freedom: The True American Dream

How to Live Debt Free

What the Experts Have to Say About Debt

Different Types of Debt

How Debt Consolidation Works

About Payday Loans

Myths About Your Credit Report

Consequences of Poor Credit

2. Debt Proof Living:
I found Mary Hunt when I first started to pay off my own debt. Her resources and support were just what I needed at the time, and they might be of benefit to you as well. Check it out: Debt Proof Living

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