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Why young adults are filing for bankruptcy

Many young people in South Carolina and in other states are faced with filing bankruptcy in order to clear their debt and begin repairing their finances. Sometimes this option comes up due to unexpected losses, such as totaling a car when money is still owed on the vehicle. While many young adults may feel like they have no options left other than personal bankruptcy, it is still important for them to determine if they really need to file.

Credit counseling can be an appropriate option for people who are facing unexpected financial challenges. A credit counselor can help a person evaluate their debt situation objectively to see what options are available. Before a person can file for bankruptcy, pre-filing counseling is required by law. Debtors who qualify may be able to obtain free or low-cost credit counseling to meet this requirement.

Chapter 7 and Chapter 13 are the two main types of bankruptcy for individual debtors. In a Chapter 7 bankruptcy, a debtor's non-exempt assets are liquidated by the trustee, with the proceeds going towards creditors. Much of the remaining unsecured debt is then discharged. In contrast, Chapter 13 involves a court-approved plan that lasts from three to five years, pursuant to which the debtor makes agreed-upon payments.

An attorney experienced in debt relief alternatives may be able to help people who are struggling with debt determine if bankruptcy is a good option for them. Some debtors may find that the negative impact of bankruptcy on their credit rating for potentially the next decade is not worth it, while others may decide that discharging debt and getting a fresh financial start is worth those consequences.

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The Huggins Law Firm, PA

Columbia Office
1812 Lincoln Street
Suite 201
Columbia, SC 29201

Phone: 803-764-1558
Fax: 803-764-1563
Columbia Bankruptcy Office

Columbia Office

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925-D Wappoo Road
Charleston, SC 29407

Phone: 843-509-0039
Fax: 866-481-2325
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