When Is the Worst Age to File for Bankruptcy in Pennsylvania?
Bankruptcy is sometimes the only option for dealing with debt that is too burdensome to be paid within a reasonable amount of time. And while there are almost always certain consequences that can come along with bankruptcy, there are certain ages at which the debtor will be more impacted by these consequences than others. Whether or not a certain age is suited for bankruptcy depends on the financial situation of the debtor, as well as their financial goals for the immediate and distant future. Keep reading to learn more about the worst age to file for bankruptcy and how the experienced Philadelphia bankruptcy attorneys from Young Marr & Associates can answer any questions that people in Pennsylvania may have about the process.
Considerations to Make Before Filing for Bankruptcy
The worst age to declare bankruptcy is the age at which the debtor’s financial future will be hit the hardest. Before filing for bankruptcy, the debtor should consider whether bankruptcy is the best solution for the type of debt that they have, since not all debts can be erased during bankruptcy. They should also consider whether they are willing to delay certain purchases, such as a house or a car, due to a compromised credit score. Since bankruptcy can be a major burden of time and money, the debtor should decide whether the cost of bankruptcy will be worth the relief from debt, as well as what the advantages of filing for bankruptcy may be.
Bankruptcy’s Effect on Credit Reports
Bankruptcy can lead a debtor’s credit score to drop, and record of the bankruptcy will stay on the credit report for up to ten years, depending on which types of bankruptcy they file. Both the lower credit score and the record of the bankruptcy on their credit report can have an impact on a debtor’s ability to secure financial opportunities in the future. When a debtor has a lower credit score, the chances that they will have a high interest rate on loans or be denied a loan entirely is higher, which can be devastating when seeking a loan for a home or a car. Any age at which a lower credit score can prevent a debtor from making the major purchases that are the foundation for a healthy financial future is the worst age to file for bankruptcy. As soon as the debtor has been discharged from bankruptcy, they should begin reestablishing credit after bankruptcy.
Which Debts Can Be Erased During Bankruptcy
The type of debt that a debtor is carrying should be a major factor in the decision about whether or not to file for bankruptcy. Since only some kinds of debt are able to be erased during bankruptcy, debtors seeking relief from the kinds that can’t be erased are not advised to file for bankruptcy. Bankruptcy is only a beneficial option if the debtor has a form of debt that is able to be erased through bankruptcy. Otherwise, they are better off altering their spending habits so that they can pay off their debt in a timely way.
The debts that are unable to be erased during bankruptcy include both public and private loans, income taxes, child support, alimony, court fines and other related penalties, and personal injury payments as a result of a DUI. The following debts can be erased during bankruptcy: credit card debt, mortgages, medical debt, car loans, car lease obligations, home lease obligations, personal loans, utility bills, and lawsuit judgments.
The most common type of debt faced by young people is student loan debt, which is not able to be erased. The worst age to file for bankruptcy, if facing student loan debt, is when the debtor is young or has recently graduated from college.
How Bankruptcy Impacts Employment and Housing
Bankruptcy remains present on credit reports for many years following filing, which can have an impact on the debtor’s ability to get opportunities such as employment or housing. Landlords and employers frequently perform background checks, which include a credit check on potential tenants and employees. If the employer or landlord discovers bankruptcy, they make deny the applicant an opportunity. If a debtor is seeking a new job or apartment in the immediate future, then it is advisable for them to file for bankruptcy at a different time, if possible.
The Costs of Bankruptcy: Time and Money
The worst age to file for bankruptcy is the age at which the debtor lacks the time and money to file. The time required to file for bankruptcy involves court dates (two for Chapter 13 and one for Chapter 7), along with meeting attorneys, gathering documents, and completing paperwork. Bankruptcy also entails going to financial counseling classes before filing and before the debt is discharged. Filing for bankruptcy also requires a financial cost. The process usually costs a few thousand dollars in legal fees, and there is a bankruptcy fee of $300, though this may be waived depending on the financial situation of the debtor.
Bankruptcy Attorneys Serving Pennsylvania Residents
People of all ages are welcome to contact our Pennsylvania bankruptcy lawyers at Young Marr & Associates with their questions regarding bankruptcy. During a free consultation, the attorneys from Young Marr & Associates can help debtors decide whether bankruptcy is the right option for them and, if so, which type to pursue and when to file. Get in touch with Young Marr & Associates today at (866) 781-4058 to schedule your free consultation.