If you are a college student, you may find yourself in facing financial struggle. The truth is that many college students do file for bankruptcy today. After all, many college students are only managing their own money for the first time. The same applies to new college graduates.
Are you considering bankruptcy as a student or recent graduate? Read this guide to learn more about college students and bankruptcy options.
Options for Bankruptcy
Several different options for bankruptcy exist. Whether you are a student or not, you need to understand the different options.
Chapter 7 bankruptcy typically discharges credit cars, auto debt, medical bills, personal loans, and other types of debt. Typically, it does not discharge student loans unless there are extreme circumstances.
Chapter 13 bankruptcy often involves putting you on a payment plan so that you can pay off your debts. This is advantageous if you want to keep certain items, like cars, that you have debt on but can't make the regular payments at the moment.
The idea of discharging student loans is somewhat controversial. In fact, you often are not able to do it unless you can prove that you have extenuating circumstances. Very rarely are people able to discharge these loans.
It makes sense why students want to discharge student loans. After all, increasing minimum payments for loans and interest make these loans very undesirable.
On the other hand, Chapter 7 and Chapter 13 bankruptcy can provide some relief from student collections. Bankruptcy can stop lawsuits, wage garnishments, and phone calls demanding money. Collections will pause for a brief period of time.
Students in college may already have credit card debt and loans, especially because so much marketing material is catered to students. You can work with an attorney to determine if you would like to keep some of the debt and continue making payments. The payoff is that you can keep the items related to the debt.
While filing for bankruptcy is not ideal, it is certainly an option. You may find that bankruptcy provides you with the best step to get back on track with your finances. When you are just starting out in the world, bankruptcy may provide some assistance.
If you are still on the fence about bankruptcy, you should speak with a bankruptcy attorney like C. Taylor Crockett, P.C. who can provide you with additional information. You may discover that bankruptcy is the best option.