Oh, the shame. Imagine what people will say when they find out you are bankrupt. There is a stigma attached to bankruptcy, but there shouldn't be. Read the news, millions of people like you are losing their jobs, all across the world. Big-name companies are on their knees.

The difference between you and the big companies is that the government always seems willing to bail them out, using the taxes you and everyone else pay. Remember how the government bailed the banks out in the last recession? Did you see them doing that for people like you?

The world is not going to work if everyone files for bankruptcy continually, but you deserve a chance to start with a clean slate. Filing for Chapter 7 bankruptcy may be the answer.

You start getting foreclosure notices in the mail. It's no surprise. You lost your job and have not been able to make your mortgage payments.

When you tell one of your friends that you are worried you're going to lose your home, they tell you to file for bankruptcy. They claim that doing so will stop the foreclosure. Is this true?

It's not entirely true, but there is some truth within your friend's claims. A bankruptcy filing puts an automatic stay on all other financial legal actions pending against you, such as a foreclosure. This delays the case. It cannot move forward until you get through your bankruptcy case.

When financial pressures mount, the anxiety you feel can quickly escalate — especially if you're worried about losing your home. You think bankruptcy may be your only solution, but you hate the idea of giving up the home you've loved, tended and lived in for years.

Take heart. As long as you can afford the payments, there's a fair possibility that you will be able to keep your home. Here are some of the factors that will ultimately determine what happens:

• The value of your home: If you have a lot of equity in your home, that could be considered assets that can be used to pay off your debts — although exemptions sometimes apply.
• The type of bankruptcy you file: Chapter 13 bankruptcies are more flexible and let you reorganize your debt, while Chapter 7 bankruptcies do not. If you file Chapter 13, you may be able to keep your home even when it has a bit of equity.
• How far behind you are on the mortgage payments: Your house is considered a secured debt, so bankruptcy won't stop foreclosure forever. It can, however, allow you time to negotiate a new agreement with your bank to make up any missed payments and keep your home.

Money troubles often happen due to unexpected circumstances, and there's no shame in this situation. You have to be proactive and look ahead.

Life's circumstances sometimes aren't the best. When your money is impacted by things out of your control, you might feel helpless. You know that your bills need to be paid, but you don't have a way to make that happen. Your focus then becomes making sure that you're doing your best to take care of necessities. Other bills, such as credit cards and medical accounts, might go untouched.

For some people, the situation becomes too much to handle, and they know they need to do something. Filing for bankruptcy is one option that they have in these cases. Consumers will typically either file a Chapter 7 or Chapter 13. The primary difference between these two is that the Chapter 7 bankruptcy liquidates nonexempt assets and doesn't require the person to make any payments. A Chapter 13 liquidates some assets, but the person has to make payments to the bankruptcy trustee on a set schedule.

One benefit that both bankruptcy types offer is the automatic stay. Once you file, creditors can't contact you to demand payment. This puts a stop to phone calls and collection letters, so you can have peace of mind while you're getting your finances back in order.

When it's time to update your will and your estate plan, take a moment to update your beneficiary designations, as well. This is something that people often forget, and it can prove very costly.

For instance, your life insurance company asked you to pick a beneficiary when you bought the policy. You probably picked a child or your spouse. That's what most people do.

Say that you chose your spouse, wanting to support them even if you passed away. However, you and your spouse have since gotten a divorce. You updated your estate plan to leave items to your children and cut out your ex. However, if you don't update that beneficiary designation, the life insurance payment could still go to your ex — and not your kids.