Texas mom, 22, says her $91K bankruptcy is ‘not as bad as it’s made out to be’ in viral TikTok. Here’s the real impact

When a 22-year-old mother living in a camper in Texas posted a video about her decision to declare bankruptcy, she likely knew people would have feelings about it. But with over 4.7 million views and thousands of comments, everyone seems to have an opinion on her choice (1).

In her video, Gracey Wilkerson, who goes by gracey._.ann online, says, “Filing for bankruptcy really isn’t as bad as it’s made out to be.”

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And she isn’t alone. In 2024, more than 517,000 households filed for bankruptcy. That represents a 14.2% increase in the number of filings since 2023, according to the United States Courts (2).

While bankruptcy might feel like an easy path to a clean financial slate, bankruptcy rarely solves all of your financial problems. In fact, pursuing this option could end up adding to your woes down the line.

Can bankruptcy erase $91,300 in debt?

By age 22, Gracey said she had racked up $91,300 in debt. According to her video, the bulk of this is accounted for with a $51,000 balance on a truck, $5,000 on a motorcycle, $13,400 on the camper she lives in, $2,200 worth of medical bills in collections, $7,700 in credit card debt, and $12,000 in student loans.

“I’ve had such a bad financial burden the last couple of years,” she said in her viral video (1). She is an influencer who uses the TikTok Shop affiliate marketing program to earn money from her videos.

While she said, “Truthfully, my consumer debt is really not that bad,” the reality is that she carries a significantly more debt than most people her age. According to Experian, Gen Zers aged 18 to 28 had an average consumer debt balance of $34,328, which is approximately a third of what she had racked up. And keep in mind that those debt figures include mortgage debt held by younger homeowners (3).

Bankruptcy is often a measure of last resort. Before turning to this drastic option, most try almost anything else to get their debt under control. But when things get too dire, bankruptcy might be the best course of action.

Specifically, many experts point out that bankruptcy might be the right move if creditors are beginning to sue you, garnish your wages, or foreclose on your home (4). Other signs that it might be time to consider bankruptcy include using a credit card to pay for all necessities or tapping into your retirement accounts to keep up with your bills (5).

While pursuing bankruptcy might help you eliminate some debts, some will stay on the books. Specifically, student loans are difficult to wipe out through bankruptcy. For example, after filing for Chapter 7, this 22-year-old’s $12,000 of student loans will stick with her (1). Therefore, households struggling under the weight of student loans likely won’t find relief through bankruptcy.

Read More: Are you richer than you think? 5 clear signs you’re punching way above the average American

The fallout from declaring bankruptcy

Once Gracey realized she was dealing with more debt than she could handle, she wisely turned to a bankruptcy attorney to explore her options. Anyone considering bankruptcy should consider the same, because this is a complex legal decision.

During her filing, she decided to keep her camper and its accompanying debt. Other than her student loans and the camper, no debts will be coming with her after the process is complete. However, she is choosing to turn in her truck and motorcycle as a part of the deal.

If she didn’t file, she’d either need to keep up with the large loan payments, or likely face repossession of at least some of her assets, possibly including the camper she lives in.

Beyond shedding some of her debt and losing some of her assets, Gracey will feel significant impacts on her credit. Typically, a bankruptcy will negatively impact your credit score in a big way. Depending on the situation, you might see your credit score drop by around 200 points (6). And the black mark of bankruptcy can stay on your credit report for up to 10 years (7).

If she wants to take out any loans in the near future, including a home loan, this bankruptcy will haunt her. In all likelihood, she won’t be able to obtain a mortgage on a home for several years (8).

For Gracey, the deed is already done. Of course, she would have been better off if she had never accumulated the debt in the first place.

To avoid her situation, stop and consider before you sign up for loans that put pressure on your finances. Making it a point to spend less than you make can help you avoid racking up too much debt.

But if you find yourself dealing with an unsettling amount of debt, there are ways to get it under control as soon as possible. Start by listing out all of your debts and nailing down your exact income. With those two numbers, you can start making a plan to eliminate your debt.

Many advocate for the snowball method, which involves paying off your debts from smallest to largest. Cutting back on expenses where you can is a good place to start. But finding ways to increase your income through pay raises and side hustles can help you make real progress toward stabilizing your finances without turning to bankruptcy.

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Article Sources

We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.

Gracey._.ann on TikTok (1); United States Courts (2); Experian (3); NCLC (4); LegalZoom (5); Experian (6); CFPB (7); Experian (8)

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.