Get ready as the whole world exerts a collective ‘I told you so’, Octomom Nadya Suleman has filed for bankruptcy three years after giving birth to only the second set of living octuplets in the United States.
Suleman, who already had six young children when, with the help a fertility specialist who has since lost his medical license, gave birth to a litter of children in 2009. Yes, I said litter. The Caesarean birth of her brood required 46 medical personnel and brought the total number of her children to 14. Suleman garnered a considerable amount of attention when the public learned about her already large family and the new mom’s desire to continue having children despite being blessed with so many already. Today in the U.S. the average family, according to the census, is 3.24 people and less than one (.94) children under the age of 18. Suleman declared boldly that she would never take public assistance and would be able to support family, but she has reportedly been collecting food stamps and last Friday filed for Chapter 7 bankruptcy in a California court with close to $1 million in debt, including $30,000 in back rent.
I’ll spare Quizzle readers my social diatribe on responsibility and parenting and leave the judgment of this obviously crazy woman up to you. Instead, this is a great opportunity to take a quick look at personal finance and bankruptcy. What I will ask is a simple question, with in-vitro fertilization costing up to $10,000 a cycle where did she get the money in the first place. When she was impregnated with the octuplets the mini-celeb was already living in a small three-bedroom house with her mother, already in foreclosure.
Children are Expensive
How many times did we hear it as children, ‘money doesn’t grow on trees’. A notion, even as a child, I thought was silly but never realized until adulthood why my parents chose to use such a ridiculous cliché to curtail my desire for new toys, video games and endless trips to the ice cream parlor on hot summer days.
To give you a little perspective, the United States Department of Agriculture (USDA) issues an annual report on the cost of child rearing. According to the USDA the cost of raising a child for an average, two parent family with two children ranges from $11,880 to $13,830 per year, or $226,920 from birth to age 17. Take into account all Octomom’s children and the total nut for raising her family comes to a little over $3.1 million! If you’re curious you can read the full USDA 2010 report here.
Chapter 7 vs. Chapter 13 Bankruptcy
In the wake of the financial tsunami of 2008 many families and individuals lost their jobs, much of their savings, their homes and have otherwise been overwhelmed with debt. Let me first say, if you can avoid it, bankruptcy is truly the last measure anyone should take to settle his or her personal finances. Octomom, as we can see from the cost of raising children, and as a result of some of her own poor financial choices, has most likely reached the high water mark so to speak.
Chapter 7 bankruptcy, also known as ‘liquidation’ bankruptcy, is the most severe form of personal bailout. The Chapter 7 bankruptcy trustee is charged with cancelling all, or many, of your debts. Furthermore, the trustee may liquidate your current assets to pay off creditors. If you file for Chapter 7, it leaves a deep pockmark on your credit for a decade – no exceptions.
Chapter 13 is slightly different. Only marring your credit for seven years, filing Chapter 13 bankruptcy as an individual does not mean liquidating your assets. Instead, Chapter 13 is designed to give people overwhelmed by debt protection against foreclosure and wage garnishment, among other things, by allowing the filer to reorganize, reduce, consolidate, or in some cases eliminate debt.