Stay out of bankruptcy in your 20s

Young people can find themselves burdened with debts, but the solution isn't to declare bankruptcy. Here are 5 reasons they shouldn't file.

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VIDEO ON MSN MONEY

133Comments
Dec 23, 2012 9:42AM
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I work in bankruptcy and always find it interesting to read these sort of articles.  While I agree it is important to try to pay off your debt the information provided in this artical is deefinitely not true.  It does not take 7-10 years to buy a new house, qualiy for competitve interest rates on credit cards or to move on with life as usual.  Check your facts next time, don't sensationallize.  This article feels like the author is trying to stretch the thought that bankrutpcy is immoral and irresponsible and will haunt you forever...just not true. 
Dec 23, 2012 5:23AM
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Of course this article neglects medical debt because the United States doesn't cover its citizen's healthcare. Exactly how should a 27 year old pay off $200,000 in medical debt from a disfiguring accident that private health insurance is refusing to cover?
Dec 23, 2012 6:18AM
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You will never hear one of these so-called experts advise people any other way, it's always, "never file". I disagree with that because many times bankruptcy can be more beneficial than not.
Dec 23, 2012 7:19AM
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MOST PEOPLE FILING BK DO SO AS A RESULT OF LOSS OF JOB OR SERIOUS MEDICAL BILLS -- NOT EVERYONE FILING IS A DEADBEAT!    IN FACT MOST ARE NOT-- THE SYSTEM DOEN NOT FAVOR THE DEBTOR-- NEVER BE A CO-SIGNOR ON A STUDENT LOAN
Dec 23, 2012 9:14AM
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Good credit isn't even worth what it used to be worth. 
Dec 23, 2012 7:25AM
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Article is great for laughs, terrible for reality.
Dec 23, 2012 9:45AM
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it will not be the end of the world if you file bankruptcy

 

Dec 23, 2012 9:43AM
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i wonder who posted this article on msn.  sounds like all financial institutions to me.  in reality, people will do what they have to in order to survive.
Dec 23, 2012 10:31AM
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I filed about 6 years ago, and it was the best decision i ever made.  I was working 2 jobs to make ends meet, and after words I learned how to spend wisely.  Now I have a much better job, a higher credit score, and just bought a car with the lowest interest rate I've ever paid.  Not sure how it would work for someone else but for me it was the only and best option.
Dec 23, 2012 9:54AM
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Baloney- your credit is already trashed because you can't pay your bills- true it doesn't cover student debt.  My daughter had an exboyfriend use her good credit to (yes gullible) to furnish their apt etc... then adios.  No way in hell is she paying for that so yes - bankruptcy and three years later all is good again and credit back in upper 700.  Sometimes it IS necessary.
Dec 23, 2012 10:18AM
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This is just more of the old "bankruptcy is not moral" nonsense. The point about not being able to get credit or decent rates for 7 - 10 years is totally false. You can begin to rebuild your credit within months of filing by using prepaid credit cards, etc. A responsible person who pays their bills on time will have rebuilt credit within 5 years of filing, at most. Bankruptcy is a very good alternative for people who are swamped with debt due to illness, job loss, etc. and can give them a fresh start in life. Lenders actually view a person who has discharges their debt in bankruptcy in a more favorable light than someone who has accounts in collection and has a debt structure impossible to handle.
Dec 23, 2012 11:04AM
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This article basically says that bankruptcy will ruin your credit. It fails to mention that if you are already in debt over your head with no prospects of digging your way our your credit is ALREADY shot - bankruptcy or not. Also fails to illustrate the distinction between Chapter 7 and Chapter 13/11 bankruptcies.
Dec 23, 2012 10:24AM
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In the USA it seems like things are set up for people to fail, just because they aren't born with that silver spoon in the mouth.

Dec 23, 2012 9:14AM
Dec 23, 2012 10:39AM
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If you have a large amount of debt, it is the best thing to do! That is why the 1% and CORRUPT companies do it all the time, ask trump! That is why that mister EbuDA mitt said, let GM go bankrupt, so that the 1% pigs could destroy the union, screw all those bad union workers and still millions!  Remember the only bad thing that comes from bankruptcy, is that you cannot file again for 10 years. It use to be 7 years, but business screwed you on that, as did the government with student loans. Only the crocks will tell you not to do what they all do!
Dec 23, 2012 10:20AM
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It's sad to say but what you should have done is go on welfare until you get a job or finish school. Free medical on medicaid with 100% coverage, food stamps, rent subsidy, free cell phone with 250 hours, education subsidy etc.etc. This is why welfare is a career move for 47 million people. Welfare has become a multi generational way of life since 1968. One has the right to have a child, and the entitlement to force a 3rd party taxpayer to support mother and child. Then have more children and have the same entitlements. Most americans have rendered even basic math politically incorrect to retain their entitlements. We have an economy based on these entitlements. The big USA bankruptcy is on the horizon. We have a $ 16 trillion national debt and proceeding at warp speed to financial collapse with $ 1 trillion annual deficits with  welfare and military complexes we cannot afford. Wash D.C. both dems and reps are taking the country to bankruptcy. Most americans are not concerned about this impending financial disaster.  Americans are concerned about homosexual marriage and legal Marijuana. Here stands our republic Mr. Webster " a nation of fools ".  
Dec 23, 2012 10:47AM
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what i see wrong in the first place someone making 8 grand a year should not be able to get 60 grand in credit cards. What should happen in these cases the CEO and should have to pay for the bankruptcy for letting someone get this much credit. Now for school that's fine but to buy clothes a tv and other stuff no because when they do not pay that raises the price at the store and interest rates  credit. It upsets me because I know (and you you do also ) someone who ran up bills on his credit card  big car, 55 inch tv, strip clubs, and partying and makes 60 grand a year and went bankrupt he owed 90 grand. So basically he had a couple of years of partying which We have to pay for in higher interest rates , higher prices at the store etc. Sorry credit card companies need to pull in the line
Dec 23, 2012 10:56AM
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Geez Louise MSN get your facts straight. I'm in real estate and it's not true you can't buy a home for 8-10 years.  It only takes a minimum of 2 years after a bankruptcy discharge to qualify for a FHA loan (min FICO 620) and you can read build your credit within that two years.  

I've really surprised at sometimes the poor articles MSN posts on their website.
Dec 23, 2012 12:55PM
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Statistically speaking 27 year olds don't have $200,000 in medical debt so it's not as big an issue as you would like it to be. Moreover the "accident" that caused the debt you speak of was likely due to ignorance and I'm a strong believer in survival of the fittest, thinning the herd if you may, so I don't think society should pay for the continued procreation of morons. The U.S. now does have the socialist health system that you have therefore our morons can now wait 6 months to have their tooth pulled. My ancestors health insurance policy was... "Don't run with scissors", "Don't climb trees", "Don't fight", "Don't smoke cigarettes", "Take care of yourself". It worked for them, it will work for me. You can lay down and let the government take care of your sorry self if you want... I don't. And I certainly won't ask a moron to help me.
Dec 23, 2012 11:15AM
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This article is really really bad, and legally and factually incorrect.  It's almost as if it's written by a credit card company representative.  First of all, employer discrimination based on bk filing status is already prohibited by federal law, and it even comes up, which it rarely does, it's at the end of the process.  Some very select jobs sure a filing may be a factor, but never heard of anyone ever being denied employment after the credit report.  Also, you're not homeless 7-10 yrs after filing.  All the big banks have used a 2 year waiting period from any triggering event, i.e. foreclosure, short sale, bk.  Many loan programs are moving to a 3 year wait period, but it's no way close to 7-10 years.  Landlords in my experience never deny renting so long as they meet other income tests that apply to all renters.  Finally, the bk filing for most is the only way to restore their credit score by wiping out the high balances and stopping the negative reporting.  Most see their credit scores go up about 150 points higher after filing, and have the best access and at the lowest rates to car and home loan terms than they ever would have been by letting it drag on.  The person that wrote the article just repeats common myths with 0 reality.
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