Bankrupt at 23

Living at home, I got a job in the admissions office at a local college, which didn’t cut it financially, even if I was living rent-free at my parents’ house.

So I decided to file for bankruptcy.

A friend of the family suggested the idea. As the friend, who worked in finance, explained, there was no way I was going to get ahead money-wise if I didn’t try to wipe clean the slate of my “youthful mistakes,” and start anew.

Initially, I was completely against this, as were both my parents.

But, this friend explained, the debt had gotten so out of control I’d have to start making well over $100,000 stat (and still live with my parents) to just get even with the creditors. All that before I could even start dealing with my student loans!

After the judge approved the bankruptcy, I walked away with a clean slate … and the inability to have credit cards for the next seven years. It seemed like a fair deal considering what I had done, so I reveled in the weight that had been lifted. I also felt embarrassed it had come to that point.

Over at LearnVest, a writer recalls what it was like to file for bankruptcy at the age of 23 after incurring more than $25,000 in credit card debt. Things she doesn’t mention: That filing for bankruptcy is not exactly easy, and lawyer fees can be costly, so even if your consumer debt is discharged (student loans cannot be discharged), you’ll still have to pay your lawyer. Also, your credit will hit bottom, and the bankruptcy filing will stay on your credit for at least seven years, making it difficult to apply for any sort of credit (credit cards, education loans, a mortgage, etc.) for a long time. Nevertheless, filing for bankruptcy is one of those last resort options that are available to you if you need it. Just make sure you find a lawyer you can trust.

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