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Should I declare bankruptcy?

Chicago, IL |

I'm 28, have almost $80,000 in student loan debt, big credit card bills, and a really bad job that pays $10 an hour. I don't know what to do. I have a college degree, but can't get a better job, and can't come close to paying my bills. I don't want to resort to this, but will bankruptcy in my situation?

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Attorney answers 4


Bankruptcy can discharge your credit card debt, but probably not your student loans. It can't solve your month-to-month cash flow problem, and your student loans are going to take a bigger and bigger bite over time. Talk to a local bankruptcy lawyer to get individualized advice. And be sure to tell Sen. Durbin how badly you need relief from your student loans!


Most attorneys offer free consultations so instead of trying to give you an answer based on a limited amount of information I strongly urge you to take advantage of the free consultations.

This message is intended as a general discussion of legal issues and not as a statement of fact, legal advice or a legal opinion. No attorney-client relationship is created by this message. Do not act or rely upon law-related information in this communication without seeking the advice of an attorney licensed to practice in the relevant area.


You may want to hang on if you can. Your Senator has introduced a bill in Congress to allow student loans to be addressed in bankruptcy again. Probably will not happen until 2013 if at all. Bankruptcy will get rid of all but student loans right now. Chapter 13 could be the short term answer. Talk to an attorney for some more insight.


The scope of this space does not afford an opportunity to assess the situation and advise you. Bankruptcy may be appropriate to get rid of the consumer debt, but the student loan would almost certainly remain under the current law. Changes to the law may be forthcoming, but you may need to pursue some relief before that occurs.

I recommend you assemble for legal consultation: (1) your income information for November 2011 through the present, including wages and unemployment during that period; (2) all your bills (copies neatly assembled, back pages included); (3) last four years’ tax returns; (4) a credit report (use to obtain free report if not requested in last year); and (5) other information that may apply, such as copies of lawsuits. Call at your earliest convenience to afford the most opportunity in which to be advised about your best course. You are not required to use an attorney in your area.

I do not recommend filing bankruptcy on your own. There are too many complex issues. I have seen several posts on this site for debtors who filed on their own and are seeking counsel concerning complications. Most of them will have a hard time finding an attorney to get involved to unwind the mess without the attorney charging several times what would originally have been paid.

The scope of this space does not afford an opportunity to adequately advise you. The response provided is intended to be informative, but not final. You are advised to arrange a consultation at which all facts and documents can be explored and terms for representation agreed. An attorney-client relationship must be formally established.

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