How Young Is Too Young To Declare Bankruptcy?
Financial problems can happen to people of all ages, including those in their twenties and thirties. Unfortunately, it doesn't take long to accumulate credit card debt, as well as other debts. If you are in that age group and wondering if filing for Chapter 7 is a good move, read on for some things to think about.
Student Loan Debts
Chapter 7 can eliminate a lot of debt for most filers but some of it may not be easy to get rid of. Take student loan debt, for instance. This form of debt can plague those in their twenties and thirties in a way that they probably never imagined when they were in college. While it's possible to get rid of student loan debt if your circumstances merit it, it's very difficult. You must apply for debt forgiveness separately from bankruptcy and only certain types of loans are eligible. However, that doesn't mean that you cannot benefit from filing Chapter 7 if you have a lot of student loan debt along with other types of debts.
Other Types of Debt
If you also have other typical debts like credit card, medical, payday, and personal loan debts, you can gain a great deal of debt relief by filing Chapter 7. To see what this means, take these steps:
- List all your monthly debts that fall into the above debt categories (credit card, medical, payday, and personal loan debts).
- Add up all your total monthly debts including the above debts.
- Subtract the first group of debts from your total monthly debt load.
You should find that you are left with a substantial sum of money with which to pay not only your student loan debts but also food, housing, car payments, gas, and more.
What Else Younger Filers Should Consider
Mentioning to others your plans to file for bankruptcy could bring on some very unhelpful and unsupportive comments. However, this is your decision to make alone. Here is what else to understand about filing bankruptcy.
- Making better financial decisions in the future should be the goal of all filers regardless of their age. Use this fresh start opportunity to rework your financial priorities and do better.
- If you are looking for a job in certain career fields, take into consideration the potential for a bankruptcy filing to affect your job prospects if your employer does a credit check.
- You may have more of a challenge obtaining new credit after you file. That might not necessarily be a bad thing but buying a home, vehicle, or other expensive items might not be as easy with a bankruptcy on your record.
To learn more about bankruptcy, speak to a bankruptcy law service and make a decision that is right for you.