When you are young, credit cards seem like a great idea. You can make purchases up to your credit limit and only have to repay at the minimum payment rate. And credit card companies know one source of new cardholders is college students. They are young and inexperienced in handling money, and they are full of promise, with the prospect of well-paying jobs awaiting when the graduate.
Except in this economy, where many find there may be few jobs in their major, and even if they find a job, it may be a low-paying, entry level position that may never lead to much more. Many college grads are left working for low wages in restaurants and retail, and credit card debt combined with student loan repayment obligations may lead them looking for solutions, like bankruptcy.
The credit card industry provides lots of scary propaganda that bankruptcy is the last thing anyone should ever consider. But they don’t really mean it. Many people who file for bankruptcy protection find they receive applications for credit cards before there discharge is granted by the court.
A Huffington Post tells of a college student who filed for bankruptcy at 23, after she wound up with more than $20,000 in credit card debt on her four credit cards. She noted that her bankruptcy help her recover her financial footing and move on with her life.
Chapter 7 can provide a fresh start for debtors who have gotten in over their heads. Her situation is not uncommon, as the average college student has four or more credit cards. If this circumstance sounds familiar, contact a bankruptcy attorney to see how they can help.
Source: Huffington Post, “Bankrupt at 23: College grad’s financial ruin and rebound,” Feb. 11, 2013