There’s a common misconception that the majority of people who file for bankruptcy are of a certain age. Some people assume those who file have spent years being irresponsible with credit cards and have purchased vehicles and homes and a variety of unnecessary items in an effort to “keep up with the Joneses,” and once they are in over their heads the only way out is bankruptcy.
Though this can be the case, it’s far from the only reason people file for bankruptcy. Older people and senior citizens file for a variety of reasons, many of which stem from healthcare or falling victim to scams. And younger people file, too. In their case, it is often a matter of student loan debt and being forced to deal with a struggling job market.
These days, more people than ever before are filing for bankruptcy and in many cases, those filing are young people with a college education. Many recent grads have crippling credit card debt and student loans so high they have no hope of ever paying them off.
For many in the “millennial generation,” bankruptcy is the new normal.
As devastating as it is to consider an adult life that begins with bankruptcy if you find you need to file you aren’t alone. The good news is as long as you are 18 years old, you are legally eligible to use bankruptcy to help ease your financial burdens. In some cases people younger than 18 years old can file with court approval.
Do I Qualify for Bankruptcy?
Keep in mind, just because you are legally old enough to file for bankruptcy doesn’t mean you automatically qualify. Bankruptcy has a number of stipulations and requirements, and whether or not you’re able to use bankruptcy rests in the hands of the court system.
A bankruptcy attorney can evaluate your debt and your income and help you determine if you are eligible for bankruptcy. If you aren’t eligible or you have other better options, an attorney will be able to explain those, too.
Should I File for Bankruptcy?
So let’s say you’re old enough to file, you have substantial debt, and your bankruptcy will be approved by the court.
Should you file?
First, it’s important to understand there are a few negative aspects of bankruptcy. It may put a strain on your credit for a few years. This means that for a few years it’ll be a challenge to obtain a mortgage, get a loan for a car, borrow start-up business capital, and do a variety of other things that require a decent credit score.
On the other hand, if your financial problems are bad enough, your credit score is likely already suffering. Bankruptcy can help you wipe the slate clean and get a handle on things. It’s all a matter of how bad your current situation is or is not.
To learn more about how bankruptcy affects your credit, check out this timeline from Bankrate.com.
The other good thing about filing for bankruptcy when you’re young is that you’ll have plenty of time to recover. If you’re forced into bankruptcy because of student loan debt a few years after graduating from college, the bankruptcy will have fallen off your credit score by your mid-30s. And for many, this is just in time to begin putting down roots, getting married, buying a home, and starting a family.
How do you know if you’re too young for bankruptcy? The only way to really understand is to speak to someone who understands the pros and cons of filing.
For more information or to schedule a consultation to discuss your situation, contact the Law Office of Robert M. Geller at 813.254.5696.