5 Reasons Not To File For Bankruptcy In Your 20s

As people reach their 20s, they find themselves in an interesting financial dilemma. They need to make purchases that require a larger salary than they are currently making. Unfortunately, they aren?t in a position to apply for those jobs that pay the larger salaries, so they develop large debts as they navigate through their financial responsibilities. On top of their monthly expenses, they may also have student loans they need to repay as they make car payments and pay their credit card bills. For a lot of people, calling a New Jersey bankruptcy attorney appears to be a highly attractive option, but there are at least five reasons why people in their 20s should not do this.

1. Bankruptcy Does Not Eliminate Student Debt

For those who have student loan debt, bankruptcy is not going to be a solution for them. They will not be able to discharge these debts, and even more difficulties await them in their retirement years if they default on these loans. In 2005, the government was granted the ability to garnish people?s Social Security payments by 15 percent, and no statute of limitations will apply.

2. Bankruptcy Does Not Help Consumers Address their Money Problems

During their 20s, people have a chance to learn how to pay their rent and buy their groceries while they also save as much money as they can. Those who manage to do this successfully find that they have the money required for a down payment on house and for other high-end purchases without needing to take out expensive loans.

For those who fail to follow the example described above, hiring a New Jersey bankruptcy attorney will not save them from financial difficulties. They will need to pay their debts by living within their means, and bankruptcy cannot help them learn how to do this.

3. Bankruptcy Lowers Job Prospects

Americans who are going to be working in a financial capacity of any kind may need to grant a prospective employer permission to do a credit check. A bankruptcy will affect consumers? job prospects because it will remain on their credit reports for at least seven years.

4. Bankruptcy Can Leave the Consumer Homeless

Bankruptcy can mean that you will have difficulties finding a place to live. If they want to rent, consumers will need to submit to a credit check. If there is a bankruptcy on their reports, the landlord may turn them down because they will see these applicants as a bad risk. Similarly, lenders may turn them down for a mortgage for their history of bankruptcy.

5. Credit Will Be Much More Expensive in the Future

After the bankruptcy has been removed from their credit reports, consumers need to work to increase their credit scores. This means they will need to apply for credit, but they will be charged the highest rates. Before people in their 20s decide that talking to a New Jersey bankruptcy attorney is the answer, they will need to decide if it is worth it.

Image Credit: B Rosen

Derek writes for multiple finance blogs. When he is not writing and researching, he enjoys teaching a night class about financial responsibility. The following article is for a new jersey bankruptcy attorney.

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