• If you look through my profile and previous posts, you'll see that I am young (just turned 22), and also may believe I don't have the right mindset or maturity yet to start REI. This is understandable, but also note that this isn't really a REI question, but more of a financial strategy question from those more experienced than me. • I know that all this should be taken as simply advice and I can't base this decision solely on the opinions/guidance of people from the internet. Trust me, regardless of the responses, I will still make the best decision I believe for myself. I'm just trying to get some light in my relatively dark tunnel, for lack of a better expression. I know plenty of people have experience in this subject or at least enough to offer some words of advice to a young entrepreneur. Now, like I said, I'm only 22. I have NO student loan debt. I had a good job for about a year. In this time, I went and financed things like crazy. Long story short, I was laid off. I'm currently over $20k in debt. All my debts are unsecured. I have loans and credit cards, that is all. I moved back in with my parents and my next focus is going back to college. I plan to get a degree in Construction Management. I feel like this would be very beneficial being that I eventually want to buy homes to fix and also possibly spec build homes at some point. With that being said, I've read a lot into filing. My parent's have had a few friends file. One filed and 3 years later, bought a new home and a new truck. One has amazing credit and he filed 5 years ago. I've also heard it's not as bad as most people think. A bunch of people believe if you file, you just can't do anything for 10 years, but that isn't the case. I've read a bunch of positives as well as negatives. Obviously every situation is different. But given what you know with my situation, what do you believe is best? If it were up to me right now, with no guidance... I would say to file and take it as a lesson learned. I think dealing with the consequences of having no credit or access to any for a few years while I go back to school and focus on my education would mature me. But I'd like to hear your advice!

A couple of questions here: 1. You're getting unemployment, and you moved in with your parents. Why not just use your unemployment, until you land a suitable job, to pay off the debt? Even at $250 a week, you'd be paying off $1000 per month - OK, let's say $800 to leave you $200 drinking money. That would be a huge dent after 7 months. 2. You may not want to work full time and go to school, but there's no good reason you can't work part time and go to school. 3. Most all creditors will work with you if you make a payment plan and stick to it. 4. If you can't "mentally" handle working full time and going to school, forget about being a real estate investor. The cold, hard truth is that being a successful real estate investor means busting your ass, and going to school and working full time at a mindless job is a mental vacation. Guess how much time I spend thinking about real estate investments? All the time. There's no "off" hours. Go ask anyone who has been successful at investing, and they will tell you that even when they are relaxing they are letting scenarios and possibilities play themselves out in their mind. When I'm pulling weeds in my tomato bed, I'm kicking around ideas. I think you can guess my vote - buckle down and pay it off. If you can live on Ramen noodles and pay off your debts, not only will you not have been sullied by a bankruptcy, you will have learned a boatload of valuable lessons about money and hard work, far more than you are going to learn in college - and I say this as a guy with a doctorate. You are at a crossroads. You can choose to be hard, or choose to be soft. Soft guys get roasted on fires like marshmallows. Hard guys retire at 45.

First off it's nice to hear someone admit their failure. Second, why would you declare bankruptcy over 20k? Since you've moved in with your parents, your only 22, plus you've had a good job in the past, why not take the next year or two to pay off the debt and go to a community college or Technical school to pursue your dreams? I mean you'd only be 24 or 25 and have no debt whatsover, so long as you don't go heavily into debt with school loans if you were to choose an expensive school. I went to a technical school for 5k a year and got a great degree in Network Administration and make a very good salary. Don't file!!!!!

Account Closed Background: I am a bankruptcy attorney. Well, you asked for advice and after reading through all of the responses I think you got what you paid for! I am not going to give you advice to file or not to file. Only you can decide what is best for you. I will however try to correct all of the poor advice given. First some simple facts- Bankruptcy stays on your credit for 10 years. Your credit will probably be better or the same after filing bankruptcy as it was before filing. Why? The two biggest parts of your credit score are how much debt you have (currently a negative) and your payment history (unknown). Most of my clients are between 630 and 680 a year after filing. Bankruptcy is a negative but it is not given the same weight as the debt you are currently carrying. It is fairly easy to recover from a bankruptcy but it is dependent on what you do going forward. I have a steady flow of clients who have to file bankruptcy to keep their military clearances or gaming licenses because they are less of a risk after filing bankruptcy than before. There are over a million people who file for bankruptcy every year. (For all of you getting your undergarments in a twist- please see the morality section below.) Debt consolidation!!!!!!!!!!!!! Debt consolidation is a scam unless you do it yourself or go through a true non-profit like Consumer Credit Counseling Services (CCCS). But guess what? Debt consolidation and debt management plans wreck your credit worse than bankruptcy. Why? Because you are not paying according to the terms of the agreement. Therefore, late payments are being reported and the final note will say something to the effect of "settled for less than full". Debt consolidation works like this: you hear a commercial promising to pay your debts for less than you are paying now over the next 3-5 years. You sign up and start making a monthly payment. 8 months to a year later, you get sued and the consolidation company says, "sorry, we can't help you, we are not lawyers. Oh, and by the way, all of the money you just paid us was applied to our fees. The next 2-5 years was going to go to the creditors." Debt consolidation companies can not control the creditors. They use the normal collection cycle to milk you out of a couple grand and then they are on to the next one. If you want to go this route- read Dave Ramsey and do it your self. (It is possible, hard, but possible if you have the extra income.) You can only do three things in your situation: 1. Do nothing ( the- can't get blood from a turnip- idea; only good if you have no income and no assets and you do not plan to change that in the foreseeable future). 2. Work with your creditors (everything from settling the debt to paying them in full through wage garnishment or asset seizure). 3. Bankruptcy How do you decide what is right for you? Everyone has a line. This line is the mathematical point where one penny over it and you can not recover. It does not matter how hard you try or how much you work, you can never pay back what is owed according to the terms of your agreement. Are you there? I can't answer that for you. I have filed bankruptcy for people who owed millions of dollars and for a person who owed $3000. What would the commentators here say? The first was "justified" and the second one wasn't. The second was a 70+ year old man bringing in $850 a month in Social Security and his debt was loan companies charging 119% interest. His payments were more than his total income and he could not work due to his health. The point is there is a line. The amount is not important. The line is. Only you can figure out what that line is. You can work the next 10 years and still end up filing bankruptcy. One of the leading causes of divorce is conflict over finances. Why on earth would someone prioritize the quarterly profits of Capital One over their own marriage? Because of advice as given in this thread. Now my opinion (the morality section). Quick note if you are a religious person- bankruptcy originates in the Bible. Forgiveness is a part of every religious belief I am aware of. No one is perfect. An underlying assumption of most of the posts is one of a "moral" obligation on the part of the individual contemplating filing bankruptcy. This makes me see red. Every single lender on a national level has committed criminal acts against consumers. (Remember too big to fail and its aftermath anyone?) Every. Single. National. Lender. Many smaller lenders do as well. Guess what happens to the bank? Pay a fine. (Not to the people who were hurt of course; but to the federal regulatory agency.) Move on. (In my best announcers voice) In this corner we have Big Bank X spending billions of dollars on research and marketing with hundreds of years of institutional memory in the smartest minds from the best schools, all laws and regulations are influenced and approved by their lobbyists, all regulators either worked for them or will some day and in the other corner a 22 year old. The world is different than it was 200 years ago. The banks are big boys and they know what they are doing. It is business to them. They created it! They are making money all the way until they push you off a cliff. There is a culture trying to keep you on the edge for as long as possible. Who do you think benefits from this attitude? (Hint: its not you.) It is a business for them and it is time you treated yourself as a business. Make your own business decision. That may mean doing everything you can to avoid bankruptcy or recognizing that you have crossed that line. Good Luck!

$20k in the whole probably feels like a huge weight, but honestly its not that bad. It is the amount of a modest new car. At 25 I was about $60k in the hole. I actually think being in debt helped me in the long term, because I was forced to live way below my means to pay it off. When I had finally paid it off, I was so used to that money coming in going out to service my debt, that I very quickly had a huge bank roll to invest with. So my advice would be to just learn to master your finances and pay the debt off.

Please keep in mind that bankruptcy affects more than just your credit score. It can affect your insurance rates, your ability to find housing, and (as insane as it is) you can even be turned down from corporate jobs for having a bankruptcy on file. I also see from the other thread that you lost your job only 9 days ago. To speak very bluntly, I wouldn't recommend any action other than polishing up your resume right now. 9 days is too short of a time frame to process and internalize your new situation, in my opinion. You should not be making any moves as drastic as declaring bankruptcy before truly settling down and approaching your situation from a centered mindset.

Pay off your debt. You shouldn't get to file bankruptcy because you were financially irresponsible especially while working. Make a plan to pay the debts and hop to it.

Should I file for bankruptcy?

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