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Bankruptcy Among Kentucky College Grads is Growing

A recent CNNMoney story reports that an increasing number of college graduates are filing for bankruptcy, as everyone has been affected by the nation’s poor economy.

College graduates are the lifeblood of our country’s future. Without bright young people who have spent years developing the skills necessary to be successful, America is going to have problems. Yet, these young adults are coming out of school with mounds of debt from student loans, book loans, housing, living expenses, car payments and credit card debt.
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And with the nation’s unemployment rate around 9 percent, many of these young people have had difficulty finding work.

But there is help. Filing for bankruptcy in Louisville can discharge many debts and through Chapter 13 bankruptcy can defer payments on student loans if the process is handled by an experienced Kentucky Bankruptcy Lawyer.

According to a survey of 50,000 respondents from 2006 to 2010, the rate of college graduates who have filed for bankruptcy has risen 20 percent. Non-college graduates make up the majority of debtors — 70 percent.

But the study found that while bankruptcy filings have increased in that time frame, which is no surprise, the number of people making more than $60,000 a year who are filing for bankruptcy has also increased. In 2006, only 5.5 percent of debtors made that much, but in 2010, more than 9 percent of bankruptcy filers made more than $60,000 a year.

Most of those who filed for bankruptcy were married couples, while based on race, Asian-American filings doubled and Hispanic filers increased slightly. African-American filers dropped from 15.4 percent in 2006 to 11.3 percent in 2010.

There has been legislation proposed in Washington D.C. that would allow for student loans to be discharged as part of bankruptcy proceedings. As the law is currently written, student loans can’t be discharged unless the student is physically unable to work and the loans are an “undue hardship.”

That can sometimes be difficult to prove, so the new legislation, if it passes, would be a tremendous help to those who have tens of thousands or hundreds of thousands of dollars in student loan debt and no job to show for it. Too many of these students are falling prey to predatory loan companies writing for-profit commercial loans.

These are tough times financially and citizens are being forced to look at all means avaialable in order to help get them out of debt.

What those in this position in Louisville should consider is bankruptcy. Filing for bankruptcy can enable consumers to get rid of debt that has been mounting for years and get them back on track financially. If college graduates, who are more likely to find work, are filing for bankruptcy in record numbers, those without an education could possibly be in a more difficult position. Starting your career buried in debt is no way to live life.

Everyone is affected by the poor economy and bankruptcy can work for just about everyone. But it is a complex area of law that should be navigated by an experienced Louisville Bankruptcy Lawyer.

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If you need to speak to a Kentucky bankruptcy attorney or Louisville foreclosure defense firm, contact the Schwartz Bankruptcy Law Center at 866-270-4495 for a free and confidential consultation to discuss your rights.

More Blog Entries:

Kentucky Bankruptcy and Student Loans: July 27, 2011
Additional Resources:

Bankruptcy among college grads grows, by Aaron Smith, CNNMoney

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