Bankruptcy— the reality is, most Americans are one life-changing event away from a major financial crisis.

In our feel good society, instant gratification, and everyone is a winner world, we have created a myth

chased by millions of individuals who work hard to dispel any signs that this same "myth" could come

crumbling down in a New York minute. The good old US of A is the second most educated country in the

world, 68% of the population owns their own home and contrary to current news trends only 16% of American adults are currently without health insurance according to the Gallup-Healthways Well-Being Index data.

We are invincible and with everything going for us why would we worry about ever having to deal with the grim reaper of reality. The truth is the reality of financial disaster is just a heartbeat away to millions of Americans every year and increasing.

The evil world of bankruptcy is what we read about in the news, it is what happens to irresponsible people who make unwise choices, who are lazy and don’t work hard. They are not like us, we did all the right things, graduated college, got a good job, bought a home, started saving for the future, contributed to worthy causes, and in short we are immune to the disasters of the world.

Reality has a way of catching us off guard. Most of the time it creeps up on us in a myriad of ways. Cut backs at work, job losses, investments gone south, a sluggish economy, depressed real-estate values, business failures, divorces, and the number one cause is a catastrophic illness.

In a couple of recent articles, I read that most bankruptcies were in the class of people earning low incomes, specifically around the 20 thousand dollar mark. In my experience no one is exempt. I have had so many young professional couples that were living their dream lives with good jobs, doing all the right things that suddenly wake up one fine morning and find either a child or one of them stricken with a catastrophic illness. It is amazing what we will do for a child or a mother or father when real disaster strikes. We do whatever it takes. Resources run out and we start using credit to survive.

Disaster hits our elderly as well. In a study by AARP between 1991 and 2007, the number of people aged 65 and older who were overwhelmed with debt and unable to pay rising medical costs and filed bankruptcy went up by 150 percent. According to another study by the American Journal of Medicine in 2007, sixty percent of people who declare bankruptcy are in over their heads due to medical bills.

Sure, there are many people filing bankruptcy who are spending willy-nilly or gambling away the farm but the facts are that 90 percent of personal bankruptcies are the direct result of job loss, medical bills and divorce.

Bankruptcy in many cases is the only way out. No one wants to go through the agony, humiliation and total feeling of failure to go to court having their obligations expunged. Having had first hand experience, my goal is to work with individuals without judgment, to provide sound advice, and to guide them to credible credit counseling. Bankruptcy is a last resort for most people and certainly one of the most crushing decisions they will make in their lifetime. So we all need a reality check in the way we view the real world of finance.

Bankruptcy Planning

In October 2005, there was a reform of the bankruptcy law.

It’s called The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA).

There were a lot of complicated changes, If you are a permanent resident of Florida you can file for bankruptcy in a Florida bankruptcy court. Each county in Florida has been assigned to one of the three districts – Middle, Northern and Southern. You file for bankruptcy in the district where you reside.

The court will look at your activities prior to filing for bankruptcy. You must give full disclosure and be honest with your answers in your petition. Filing for a Chapter 7 bankruptcy can require preparation. Here is a list of things we suggest not doing if you are considering filing for a Chapter 7 bankruptcy:

• Don't borrow money.

• Don't use your credit cards.

• Don't take credit card cash advances.

• Don't do balance transfers.

• Don't give property or transfer property to anyone.

• Don't file bankruptcy if you are about to receive a tax refund or inheritance. Discuss the timing with your attorney.

• Don't purchase a home without consulting with an attorney.

• Don't pay more than $600 on any past due bill.

• Don't cash out retirement plans or 401k's.

• Don't take out a second mortgage.

• Don't write bad checks.