The thought of filing bankruptcy might be more than you can bear, but something you have to contemplate given the current financial landscape. The question for many is whether bankruptcy is the end of the road from a financial perspective.

The first thing to understand is there are many different forms of bankruptcy. Chapter 7 is a form of liquidation where every debt and asset, for the most part, is wiped out. Chapter 11 is more of a reorganization approach where the debtor gets to keep more assets, but must come up with a plan to pay back much of the debt owed to creditors. Chapter 13 is a variation of this.

Filing for bankruptcy protection has long been an acceptable act for businesses. Many use it as a tactic to force creditors to negotiate new positions on debt. Personally, however, bankruptcy has long been associated with embarrassment. Most people assume a person that files for bankruptcy is someone who had no financial discipline and just ran up a bunch of debts. In truth, the number one cause of personal bankruptcies is huge medical bills, but that is another subject.

So, is bankruptcy the end of the road for you from a financial perspective? Absolutely not. In fact, you'll be shocked that certain creditors will be offering you deals immediately. Why? Because they know you can't file for bankruptcy for another seven years or so.

Ah, but what about the stigma? Well, there may have been a stigma ten years ago, but can that really be said to be true today? The last three years have seen such a financial meltdown that millions of people have sought bankruptcy protection. Given the sheer numbers, how can one assume there is any stigma left whatsoever? It seems a dubious distinction at best.

Filing bankruptcy is not the end of your financial life. Instead, it is a new beginning. Just make sure you learn the lessons of your previous financial follies and don't repeat your mistakes.