Like many other things in life, we rarely plan for personal financial crisis. This means that when we encounter credit problems, we usually ill-equipped to deal with them.

As well, credit debt problems typically strike at the most inopportune time... when we are older and time seems to be a commodity. That means that Chapter 7 bankruptcy, which would help us the most in dealing with our credit debt problems is either not available or we refused to take that route because we do not want to lose our most-prized assets like our home.

In our later life stages, Chapter 7 bankruptcy makes very little sense. If we lose our assets and our credit suffers, we must wait upwards of 10 years before we are able to obtain additional credit to re-establish ourselves. Dealing with credit debt problems therefore becomes more important as we get older.

The best time to file for Chapter 7 bankruptcy is when we are young, single, and starting out. In this life stage, we have typically completed our formal education stage and are entering the workforce, getting ready to start our careers. Our top earning years are way ahead of us. We may have purchased a vehicle and taken a trip, meaning our credit debt problems have barely been conceived! We might even live at home or are just starting to plan for a home purchase.

This means that while the "Single and Starting Out" stage is the best time for Chapter 7 bankruptcy, it is also the most unlikely time that we will ever need this type of protection. Any credit debt problems we have in this stage are quite likely personal-debt related, money we owe family and friends, and possibly a heavy student loan debt (which are more frequently exempt from bankruptcy).

The reason why this stage is the best time to file for Chapter 7 bankruptcy is that most people can sacrifice a decade of home ownership in favor of saving a larger down payment. While this certainly excludes the young individual from the benefits of early home ownership, it also saves him or her from the credit debt problems that many friends will invariably encounter as they enter the next life stage, which rise with establishing a family and starting up savings plans.

While the goal of most individuals is never to willingly file Chapter 7 bankruptcy, credit debt problems are also something that very few people ever plan on having to deal with. To avoid these problems, we should ensure we have an adequate emergency savings program in place and that we have left enough of a credit buffer so that credit debt problems do not ruin our credit record. In terms of the life stages, we should aim to establish such a savings plan as early as possible and make sure we are well positioned to deal with credit debt problems in the next life stage before we make any large commitments or purchases on credit in the existing stage of life.