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 August 29th, 2010 in Bankruptcy Q And A. Tagged: credit card debt, filing bankruptcy, grad school, student loans.
Let me get this straight, you rang up 8K in credit card debt and you don’t think you have to pay for it? In my book that’s stealing.
August 29th, 2010 at 9:25 amNo you should not file bankruptcy. $8000 in credit card debt is not too bad. Bankruptcy will destroy your credit and will affect your chances of getting a job.
If you’re having serious trouble paying back your debt, bankruptcy is not an easy out. In fact, bankruptcy should be considered an absolute last resort. And, after all your effort, student loans are not normally included in a bankruptcy filing. It is difficult to prove "undue hardship" unless you are physically unable to work and there is no chance of your making money. To discharge your student loans under this special case, you must file a separate motion with the bankruptcy court and present your situation before a judge.
Bankruptcy filings stay on your credit report for 10 years and will likely limit your ability to get a mortgage, borrow money, or get a job. If you’re having trouble making your payments, contact your student loan lenders and see if you can arrange an easier repayment plan.
Under the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, privately funded student loans are treated the same way that loans funded and guaranteed by the federal government or nonprofit institutions. Prior to the new law, if you had a loan from a private-sector lender that was not guaranteed, it could be discharged under chapter 7. The new law gives these loans the same protection as the guaranteed loans.
If you would like to discharge your student loans under the "undue hardship" exception, you must file a separate motion with the bankruptcy court and then appear before the judge to explain your hardship. This is not an easy task, so if your student loans are the main part of your debt, you would be better off not facing the harshness of bankruptcy as courts are extremely reluctant to discharge student loans.
You should work on paying down your debt. Maybe you should put off your grad school. You may be able to find a job where they will help pay your tuition costs. If you are currently hiding your problems from your family, you shouldn’t be. They will find out about your debt at some point if you can’t make the monthly payments. Perhaps you can close your credit card accounts and get on a payment plan at a reduced interest rate. Talk to your creditors and find out what they can do. Your family may be able to help you out. I know you do not want to be a burden to them, but they will be disappointed if they find out that you kept this from them.
August 29th, 2010 at 9:25 amFirst you need to check whether you are qualified to file bankruptcy or not. read more about this at- http://www.diy4law.com/do-i-qualify.php
August 29th, 2010 at 9:25 am