Maybe my age is catching up with me, but whenever someone in their twenties comes in for a consultation, I always feel a little more protective than I do with the rest of my clients. Being a lawyer is full of contradictions. My livelihood is based on helping people out of rough situations, but I hate seeing people deal with the anguish and anxiety that goes with being in those situations. My job is to help them through it as best as I can and minimize their pain.
I’ve said it before, but it bears repeating: bankruptcy should be your option of last resort. When someone young, in their twenties or so, comes in for a consultation, I find myself spending more time than usual with them. Not because I’m trying to persuade them that bankruptcy is a good idea, but because I’m trying to convince them that bankruptcy is a bad idea. Usually, someone in their twenties has a relatively low amount of unsecured debt, less than $10,000. Even so, their monthly payments are overwhelming them. Just like my older clients, they are struggling to make ends meet. But I also find that they are just getting started in their careers. They are some distance from their earning potential. They are also spending a lot of money on recreational activities. Credit card companies throw credit at young adults in college, and they snatch them up. How else can someone who isn’t earning any money actually do anything during college other than study?
What I spend my time doing with these potential clients is going over their monthly income and expenses and finding out where their income goes. Usually we find that lots of money is going to entertainment, eating out, other non-essential activities, and an inordinate amount of clothing. I ask them if they think they could buckle down for 6 -12 months and bring this spending under control. If they could, they could better manage their credit card debt and avoid bankruptcy.
Are you too young for bankruptcy? Legally, no. There are no age requirements in the Bankruptcy Code? But bankruptcy has a huge impact. In the near term (the next two to three years), it will affect your ability to buy a home. In the long term, it appears that more and more courts are allowing employers to discriminate based on an applicant having filed bankruptcy before.
Think long and hard before you file bankruptcy. Ask yourself whether it wouldn’t be better to avoid the long-term effects in exchange for some short-term sacrifices of eating at home and watching reruns on television.