Student Loan Debt Play a Huge Factor in the Number of Bankruptcies Filed
Bankruptcy is Declining
Filing for bankruptcy can be a difficult decision for many people to make. While there are a countless number of reasons out there, student loan debt is one of the common reasons for a bankruptcy filing. Today, so many of us are missing out on the American Dream and, for many, student loan debt is accountable.
LendEDU, a reliable online marketplace for an array of financial products, recently published a report showing that 32% of consumers filing for bankruptcy hold student loan debt. Additionally, according to this online study, student loan debt includes 49 percent of the overall debt on average.
How massive is the student loan crisis? Numbers can tell you so much of the story. At this point, student loan debt is at a record high with a total amount of $1.5 trillion, according to the report of Student Loan Hero. The regular student loan debt for every student graduating in the year 2018 who acquired loans was USD 29,800, which is considered an all-time high.
Facts provided by LendEDU enlighten the terrible impacts of the rising trouble of student loan debt. Together with the massive costs of living as well as college dropouts, student mortgages make it exceedingly difficult for millennials to save money, which is the harbinger of eventually needing to file for bankruptcy.
To verify the report, this reliable online marketplace examined 1,083 cases of bankruptcy from non-profit company Upsolve. This company helps low-income people file for Chapter 7 bankruptcy for those with limited income who cannot afford to pay off their debt, in which the main objective of filing bankruptcy is to set the debt free.
These 1,083 cases did not comprise data for people who filed for Chapter 13 bankruptcy, which consists of debt restructuring. The consumer makes reimbursements for 3 or 5 years, intending to pay off the debt over a period of time.
The problem is that student loan debts are non-dischargeable in Chapter 7. Therefore, if the thirty-two percent of student loan debt filing for bankruptcy with the help of Upsolve get their arrears discharged, they would still need to repay almost of their arrears because it consists of student loans.
Student loan debt are at an all-time high as of 2019
Debts in student loan are one factor of The Great American Affordability Crisis, which is plaguing this new generation. The tuition in colleges keeps on increasing. As a result, students have taken on 300% more debt than their moms and dads. Baby boomers need to work just 306 hours to repay four years of college, while millennial students would need to work 4,459 hours!
Trying to decide if bankruptcy is right for you?
The Adler Law Firm PLLC in Detroit, Michigan offers FREE consultations to help people in need decide if bankruptcy is right for them. If you’re even considering bankruptcy in or near Detroit, MI, The Adler Law Firm can help show you the various options, such as Chapter 7 bankruptcy and Chapter 13 bankruptcy, and help you navigate the complexities and ramifications of each. We also offer some of the most affordable prices in the Detroit Metro area without compromising on quality. Contact Us today!