Banruptcy filings soared 32% in 2009.  And 2010 rates are up 13% over 2009! These tough times are hurting Americans from all walks of life--even celebrities aren't immune.  Actor Stephen Baldwin, baseball great Lenny Dykstra and celebrity chef Gordon Ramsey are just a few celebrities to recently declare bankruptcy.

As much as we'd like to help you get your debts under control without having to declare bankruptcy, there are times when it is the best option. We know it won't be easy, so if you or someone you know is considering bankruptcy, we hope the information we pass here will help you.

Being in the position of considering any kind of bankruptcy is terrible. Yet being stuck with a lifetime's worth of bills is no way to live, and that is why we have laws that allow people to make a fresh start.

Consider the "harder they fall the higher they bounce" school of failure and success. Many famous people have declared personal or business bankruptcy and emerged successful again. Here are some you'll recognize:

• Mark Twain
• P. T. Barnum
• former Texas Governor John Connally
• Francis Ford Coppola
• Walt Disney
• Golfing great Jack Nicklaus was on the verge of bankruptcy in the mid-1980s after investors pulled out of two golf course developments his company started.
• Willie Nelson considered filing for bankruptcy after the IRS raided his Texas homestead on tax-evasion charges and confiscated everything in 1990. Only through the help of family and friends was he able to pull himself up.

Is Bankruptcy Right For You

The first question is: "When should you file for bankruptcy?"

This is an important decision, so don't rush into it. Here's what we like to tell people as a guide: If you owe anywhere near a year's worth of take-home pay, you're in bad shape and bankruptcy might be your best option.

Notice we said "might." Make sure you talk with a credit counselor first and see if you can work something out short of bankruptcy. If not, a counselor will also be able to refer you to a bankruptcy lawyer, who will show you the ropes and represent you in court.

There are two types of bankruptcies available to consumers: Chapter 7 and Chapter 13, both named for the bankruptcy code numbers that identify them.

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