Is bankruptcy an option for someone under 30?
Often when a person thinks of someone who has filed for bankruptcy, they have a certain image of that someone in their head. Often it is a person who is at least of middle age, and irresponsible or frivolous with their money. This stereotypical picture is quite a common misconception. Many older people do file for bankruptcy, but by no means are they the only ones.
Now more than ever, millennials are looking into alternative ways to get out of crippling debt and to fix their fast-declining credit score. Between increasing costs of health care, housing, and college, being in debt can seem like the new normal for many young adults. This does not have to be the case.
Bankruptcy often has negative connotations associated with it, but there are actually some great benefits to filing while you are young as opposed to when you are older. These include but are not limited too:
more time for your credit score to recover before securing a mortgage or other loans
getting it over with: the sooner you file the sooner it's off of your record, almost like it never happened. If it unfortunately becomes necessary for you to file bankruptcy again in the future, you will have to wait 8 years after filing your first case before you are eligible. The sooner you do the first one, the more options you will have dealing with future financial hardships.
stopping wage garnishments, which millennials can face just as people of other generations can.. If ignored, a garnishment can lead to prolonged and unnecessary financial hardship.
discharging debts before acquiring assets. Older debts can be converted into judgments which can be attached to real estate, should any be obtained through inheritance or purchase. If judgments are already in place, they accrue interest at an extremely high rate.
It’s called “bankruptcy protection” with good reason: the bankruptcy code is intended to keep people from being drowned in debt when there’s little hope of paying it all off. If you are lying awake thinking about your debts, or you’re getting calls, letters, or legal papers from collectors, it’s time to call for a confidential free consultation about your situation.