Bankruptcy filings skyrocket: What you need to know if you decide to file

Cecilia Deal bankruptcy advice
Cecilia Deal bankruptcy advice

"I thought I was the biggest thief in the world because I didn't make good on the loans I had taken," Cecilia Deal tells WalletPop about her 2008 Chapter 7 bankruptcy. "It was the worst. When you value honesty and sticking to a commitment and then you consider yourself reneging on that value when you file for bankruptcy, emotionally, it's really painful."

When Deal first lost her job, she contacted her creditors to see if she could work something out. "I was instructed to wait three months before contacting them again and told 'The reality is we won't work with you until you're delinquent.'"

Ultimately, Deal escaped her debts - a combination of credit card and home equity debt -- but she lost her home and even her self-confidence for a while. "My relationship with my fiance was strained. I was really lucky in that he still believed in me and didn't see me as a bad person for filing," she says. "I've seen how some spouses or families aren't very supportive and how much harder emotionally it is to go through."

It's a familiar story for far too many Americans, especially these days: They've reached the end of their financial rope, and they think they have no choice but to declare bankruptcy. If you're in this boat, the first thing you should know is that you're not alone: A staggering 158,000 Americans filed for bankruptcy in the month of March, a 35% increase over February numbers.