When trying to decide whether or not you should file bankruptcy, there are a lot of things to take into consideration. While you may not think of age as being one of those things, it actually may be a significant factor. The reason is that a person who is 23 years old is going to have different goals than someone who is in their 70s. Unfortunately, financial problems can happen to anyone at any age.
Factors to Consider When Filing for Bankruptcy
The first thing you should do if you are thinking about filing for bankruptcy is to schedule a consultation with an experienced bankruptcy attorney. If you are not ready for that step just yet, here are a few questions to consider:
- Do you have so much debt that you cannot repay it in a reasonable time period? People who are younger tend to have lower incomes than older people. However, this also means that a debt of $50,000 may seem much more overwhelming to a younger person with lower income. However, since student loans are not dischargeable in bankruptcy, you need to consider other debts when thinking about bankruptcy. Also think about how long it would take you to pay off your existing debt at your current income. Do you expect your income to increase? Do you think your debt could be paid off in five years or less?
- Do you plan to incur additional debt in the near future? If you are considering buying a house or vehicle or are thinking about going back to school and gathering additional student loans, these are things that could make a difference in whether bankruptcy is right for you.
- How is your current credit score? In the short term, filing bankruptcy could affect your credit score depending on how low or high it currently is. If you are at an 800, filing bankruptcy will hurt your score. If you are at a 500, bankruptcy could actually increase your credit score. However, even a temporary drop in credit score due to bankruptcy will allow you to rebuild your credit after the bankruptcy is completed. This is typically less of an issue for someone who is younger.
- Do you have a lot of property/assets? Younger people generally have fewer assets, but if you do have assets, you need to take into consideration how bankruptcy might affect them. Having more assets does not mean bankruptcy is not an option, but it is something to evaluate when making the decision.
Contact an Experienced Bankruptcy Attorney
If you have examined the factors above, you need to think about how bankruptcy will impact you based on your age. When you are younger, you have more time to rebuild your credit, have extra time to get a higher paying job, likely do not have as many assets, and have more time to buy a house.
When deciding what to do, you need to balance the reality of your goals with your debts. Delaying the inevitable is never a good way to deal with your problems. If you are on the fence about whether bankruptcy is right for you, contact the attorneys at Bankruptcy Law Center and let us help answer your questions.
(image courtesy of Rod Long)