Millennials and Bankruptcy
There seems to be a distinct division in our society between “millennials” and other age groups as it relates to social media, employment and now even when it comes to bankruptcy. With student loan debt now exceeding $1.4 trillion in 2019, many students find themselves unable to pay their student loan debts after graduation. After college, many recent graduates find themselves in a financial trap from which they are unable to escape.
Millennials and Debt
Millennials find themselves deeper and deeper in debt with no exit strategy, which more often than not is due to the crippling student loan debt they all face. Coupled with the staggering student loans is the fact that many millennials entered the workforce as adults immediately after a recession, making the jobs using their degrees few and far between, or making much less money than can feasibly sustain student loan repayment. As these millennials attempted to find work in the career paths of their choice, they still need to eat and live. The reliance on high-interest credit cards was the only way out for many millennials. Therefore, they now face student loan debt and credit card debt both with substantial compounding interest amounts accumulating more rapidly than they can pay them off.
Many of these millennials now find themselves in the unfortunate position of needing to declare bankruptcy; however, student loans are typically never discharged in bankruptcy. Section 523(a)(8) of the bankruptcy code will not allow anyone to discharge their student loan debt unless there are very unique circumstances that qualify as undue hardship. Termed the “Brunner” test, it requires a person to show the court that 1) they would be unable to obtain a reasonably minimally accepted standard of living if they attempted to pay the monthly student loans, 2) this financial situation would continue for the length of the student loan, and 3) they have made a serious attempt to pay the student loan and were unable to do so.
Even if the student loans ultimately cannot be discharged, credit cards and other debts may be discharged in a Chapter 7 bankruptcy, thus giving them some financial breathing room to repay their student loans. Even if they do not file a Chapter 7 bankruptcy, they may be able to file a Chapter 13 bankruptcy to give them the ability to restructure their debt in such a way that they can make their monthly student loan payments.
Reach Out to Us Today for Help
If you are a millennial and are facing astronomical debt, you are certainly not alone among your generational peers. In fact, statistics show that your situation is unfortunately more common throughout the United States than previously thought. If you are considering bankruptcy due to your inability to pay your student loans, inability to pay your credit cards, or inability to find a decent-paying job in your career field, contact the West Palm Beach bankruptcy attorneys at Kelley Kaplan & Eller at 561-264-6850 for a consultation to help you understand how bankruptcy might be able to help give you a financial fresh start.