Should I file bankruptcy?
I am a college student that just graduated and will be attended grad school. I have around 00 in credit card debt + student loans and am struggling to make the monthly payments. I know filing will destroy my credit, but I don’t need any credit for at least 5-7 years. Would it be worth filing bankruptcy to get rid of this debt? How long does it take to restore your credit to a decent standing after you file? Thank you very much for your help.
Posted September 1st, 2010 in Bankruptcy Q And A. Tagged: credit card debt, filing bankruptcy, grad school, student loans.
Filing BK does not repeat does not remove your student loans those are exempt from BK. Going back to school your school loans will not be due, and you can put them in forbearance.
September 1st, 2010 at 2:12 amHow are you going to pay for Grad school? If you have a bankruptcy, you cannot borrow anything, period. I was a former financial aid counselor, not at Grad level, but i know you cannot borrow non stafford funds if you have a bankruptcy. You wont have to pay student loans when you are in grad school, also.
September 1st, 2010 at 2:12 amWhat is your total debt?
What is your chosen profession?
If you will make MORE your first year of full time work then your debt, don’t claim bankruptcy.
September 1st, 2010 at 2:12 amThe average cost to file for Chapter 7 is $1,500….Only the $8K could be discharged if you file (no student loans). $8K is a tiny amount of debt to discharge in a major Chapter 7 filing….Unless this is an absolute emergency where you’ll end up homeless and on the streets if you don’t file, then I would advise not filing for this amount of debt.
There is a version of BK called Chapter 13….student loans can be included in this form of BK…It does not discharge the debt…It’s sort of a court enforced repayment plan that all your creditors have to accept. If all your payments are out of control then this may be an option…Another option is entering into a debt management plan.
Contact your local Red Cross for a referral to the local Consumer Credit Counseling Services (CCCS). They can negotiate reduced interest and payments (on the credit card debt only). They will require you to stop using all credit and to cut up your cards. Your credit report will be updated to "enrolled in debt management." This does not damage your credit, but it may make it difficult to obtain new credit while you are enrolled in their program….so don’t use this service if you anticipate applying for a new apartment, car loan or mortgage anytime soon, as you would might be denied while you’re enrolled in the CCCS debt management program…
September 1st, 2010 at 2:12 am