Should recent college graduates file for bankruptcy?

On Behalf of | Aug 23, 2022 | Bankruptcy

College students often build up a lot of debt when taking classes. Student loans are one of the biggest ways students take on debt, however, people may pick up debt through other means. Students may be offered credit cards that can help easily pay for books, supplies, coffee, clothes, rent and food.

After graduating, you may be looking at the hole burnt into your pocket wondering how you’ll ever pay off all your debt. While some students may have been given grants and awards to cover their student loans, credit card debt is another problem. So how can you get rid of all your credit card debt? Here’s what you should know:

Chapter 7 and Chapter 13 bankruptcy suit different needs

When looking to pay off your debt, you may have the option to file for Chapter 7 or Chapter 13 bankruptcy. Filing for bankruptcy may be a quick way to remove – or easily pay off – any debt you’ve accumulated aside from your student loans. While it’s not usually possible to eliminate your student loans, that doesn’t mean you won’t be able to pay off credit cards, medical bills, unpaid utility bills or other debts.

Chapter 7 bankruptcy is often considered the best option for many people. It’s especially good for people who own little property and have a limited income. If you’re just finishing college, Chapter 7 bankruptcy might be good for you. Chapter 7 bankruptcy may wipe away most of your regular debts in a matter of months.

Chapter 13 bankruptcy, conversely, creates a payment plan intended to pay your debt off over several years. One benefit of Chapter 13 bankruptcy is that you can protect most or all of your assets. Recent graduates don’t often take Chapter 13 bankruptcy, but if you’re taking classes late in life and already have a home and other property, this may be your best option.

If you’re considering wiping away your debt, you may wish to seek legal help that can ensure you’re making the right choice. 

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