Why Millennials Are Filing for Bankruptcy
The number of millennials filing for bankruptcy has grown at an alarming rate. Considering the prosperous period between 1980 and 2000 that this generation was born into and raised, most have found themselves in a financial rut with debt that they cannot dig out from.
Reasons for Debt
For a long time millennials have been the butt of jokes by older generations about having poor lifestyle choices, refusing to grow up and being spoiled. But in many cases, the reason why many millennials find themselves deep in debt can be traced back to the impact of significant student loan debt that is much larger in comparison to previous generations’ debt.
Contributing to the inability to pay student loans and high credit card debt is the fact that most millennials entered the workforce after the Great Recession hit. After that time, jobs that offered a livable wage commensurate with a millennial’s education and of course the accompanying student debt were few and far between.
With the ease of obtaining credit cards, the reality of living paycheck to paycheck, and not being able to put money into savings, more than half of millennials with student loan debt are troubled by the inability to pay their debt. In many cases, they resort to using high interest credit cards, or seeking relief from high interest and often-predatory payday loans, auto title loans and rent-to-own loans to make ends meet.
How Bankruptcy Can Help
Federal student loan debt cannot be wiped away through bankruptcy. However, debt from credit cards and other loans can be discharged through Chapter 7 or managed through Chapter 13 bankruptcies. By doing away with debt that is unmanageable, millennials could have the foot up they need to get out of their financial hole.