Easy access to credit cards and sometimes compulsive spending among college-age students in New York and elsewhere have combined to create a growing problem of debt among Americans in their 20s. It is estimated that 50 percent of all college students in the United States have at least four credit cards. With credit so readily available, some students may rack up huge debt without fully understanding the consequences of their actions. For some young adults, the excessive debt has led to Chapter 7 bankruptcy.
One recent college student recently shared her story. The 23-year-old described how she obtained her first credit card as a college freshman. By the time she left college four years later, she had three more credit cards and debt in excess of $20,000. Filing for bankruptcy provided a way to make a fresh financial start, however. She is now a freelance writer who has lived in New York and says she has learned a lesson from her early financial challenges.
As the young woman’s story illustrates, there is life after bankruptcy. While personal bankruptcy is not something that one should enter into lightly, filing for bankruptcy may offer a viable solution for those struggling with debt. Chapter 7 bankruptcy, also known as liquidation bankruptcy, is a common form of bankruptcy for those with significant credit card debt.It involves the sale of a person’s nonexempt assets in exchange for debt relief. Bankruptcy does not mean a person loses everything. In many cases, the assets that are exempt from liquidation, including clothing, furniture and housewares, are sufficient to meet a typical person’s needs.
A person considering bankruptcy may benefit from the advice of an experienced bankruptcy attorney. The attorney may review the person’s financial situation and help assess whether he or she would benefit from a bankruptcy filing.
Source: HuffPost Live, “Bankrupt at 23: College Grad’s Financial Ruin and Rebound,” Joe Taylor, Jr., Feb. 11, 2013by