Nadya Suleman, whom Arizona residents may know by her media nickname "Octomom," filed for Chapter 7 bankruptcy recently. The mother of 14 children, including octuplets, has said that filing for bankruptcy was one of the most difficult decisions she has made this year.
Among her creditors are the city's water department, the school some of her children attend and her father. She also fell behind on the rental payments for her home. According to reports, she owes approximately $1 million, more than 20 times the worth of her reported assets.
Suleman faced financial difficulties before the birth of her octuplets, living with her mother and six younger children in a three-bedroom house that was in foreclosure. She is currently raising her children with the help of food stamps and Social Security disability benefits. Though she has earned money for sporadic media appearances since the birth of her eight children, she has been unable to remain gainfully employed. Suleman is reportedly looking forward to the fresh start filing for Chapter 7 bankruptcy provides.
While Suleman's situation is very unique, many new parents find themselves in difficult financial situations. People often find that it may be more possible to swim through waves of debt, or survive a tough financial blow, if they are not busy raising children at the same time.
A Chapter 7 bankruptcy filing wipes out most debts and even certain taxes. It also puts an automatic stay on proceedings such as repossession and wage garnishment. In Chapter 7 bankruptcy, the court appoints a trustee to sell the filer's assets to discharge debts. A filer can rest assured that many major household items will not be sold off and an experienced bankruptcy attorney can file a reaffirmation agreement with the court to ensure filers retain possession of their house or automobile.
Although she found it to be a difficult decision, as anyone would, Suleman has said that her filing for bankruptcy was in her children's best interest.
Source: Washington Post, "Octomom' files for bankruptcy, owes $30K in late rent payments," May 1, 2012