Nadya Suleman, who is better known as the octomom, has reportedly filed for bankruptcy. In her Chapter 7 filing, the mother of 14 has listed debts of $1 million against assets of just $50,000. Her creditors include DirectTV, a private school that several of her children attend, and her father, among others. It's a case being watched in Texas and around the world.
Chapter 7 bankruptcy is an important tool available to indebted individuals across the country, including here in Texas. It allows a person to relinquish their debt, giving them the opportunity to gain a fresh start in life. However, it is not for everyone. In Chapter 7, many of a debtor's assets are liquidated so as to satisfy the claims of creditors. But for someone who is deep in debt, it may well be a breath of fresh air.
That appears to be the case for Suleman. With so few assets and such a huge burden of debt, it may be difficult to devise a repayment plan that would put her on the path toward financial independence. Through Chapter 7, though, she will likely be offered a clean slate.
Additionally, Chapter 7 may be able to prevent foreclosure. Suleman and her 14 children are currently residing in a four-bedroom home, for which she has fallen $30,000 behind in payments. A foreclosure auction had been scheduled for the residence, but it has reportedly been postponed.
There are many reasons why a person may find themselves so deeply in debt. While Suleman represents an extreme case, many Texas residents have no doubt shared the experience and pain of her financial distress. For those who are falling behind in their financial obligations, Chapter 7 bankruptcy may well provide them with the opportunity they need to start anew.