The tough economy means there are many reasons to consider filing for consumer bankruptcy.
Debt takes many forms and the effect of all of those debts is cumulative. For example, if you are suddenly hit with major medical bills, it can become difficult to make your mortgage payments. The same is true of job loss. Credit card debt can only compound these problems.
If you talk with a consumer bankruptcy attorney, you will start to see the possibility of debt relief more clearly. This involves grasping the connection between all of the various types of debt you have.
One thing you might have heard is that student loan debt is not, as a general law, dischargeable in bankruptcy proceedings. Though that is true as a broad statement, keep in mind that filing for bankruptcy can address other debts you have. This, in turn, could make your student loan payments more manageable.
There is also the question of how student loan debt impacts your ability to buy a house. According to a recent study by the Federal Reserve, only 9 percent of people between the ages of 29 and 34 got first-time mortgage loans in the last three years. That is only about half of the 17 percent in that age group who did so a decade ago.
To be sure, the fall in housing prices means that homes are more affordable. But with the slow recovery from the Great Recession, it is also harder to find the jobs needed to support taking on a mortgage payment.
For those who already have houses and are struggling with payments, bankruptcy remains a way to forestall possible foreclosure.
Source: “Student Debt is Stifling Home Sales,” BusinessWeek, 2-23-12