Too Much Credit Card Debt, Student Debt Preventing Young People From Buying Homes
What do you do after you earn your college degree and get a steady job? For years, the answer for educated and employed graduates was obvious: You buy a home.
These days, it’s not so clear-cut.
A weak job market and the ever-rising cost of college are forcing millions of young Americans to choose renting or living with mom and dad over obtaining their own mortgage. A recent study found that 36 percent of college graduates still live at home with their parents.
When younger generations opt out of home ownership, it impacts the entire housing market, keeping home values from rising to their full potential.
For young people, it becomes a Catch-22. Without a history of loan payments, it’s a challenge to get a loan like a mortgage. But how do you build up your credit history if you can’t get a loan?
Carrying too much debt and missing payments on student loans causes credit damage, and a lowered credit score leads to high interest rates and difficulty securing credit.
Without a drastic change in circumstances, bad credit can be almost impossible to overcome. As climbing rates, late payment fees and penalties for exceeding one’s credit limit make debt even more unaffordable, debtors tend to pay with credit – which of course only adds to debt.
It’s this vicious cycle that may explain why just 34 percent of people between 18- and 32-years-old own a home. That’s down from 37 percent in 2007. And fewer and fewer of those young homeowners are college graduates. In fact, folks without a college degree are actually more likely to own a home these days than those with one.
If you’re a young person struggling under the weight of debt, it can almost feel as if you’re being punished for making the responsible decision to get an education. But it’s not college that’s interfering with your future – it’s debt.
Many college graduates don’t know where to turn. And because bankruptcy – the most powerful solution to most debt problems – is rarely able to lower student debt, grads may feel they have no options.
Fortunately, they’re wrong. It’s true that student loans are typically not eligible for discharge through a bankruptcy filing. However, bankruptcy can still offer relief for most other forms of debt.
Debt is most often a multifaceted problem. Student loans interfere with the ability to pay credit card debt. Credit card debt makes it hard to pay car loans. Car loans get in the way of paying the electricity bill. There’s just never enough to go around.
But what if you could eliminate credit card debt? Lower your car payments? Wipe out parking ticket debt? And perhaps most importantly, improve credit?
Filing for bankruptcy can do all of these things – and more. Remember, bankruptcy was created by the U.S. government specifically to help struggling consumers overcome debt. By relieving most unsecured debts, you can free up more of your paycheck to stay current on student debt and other obligations – thus avoiding further fees and penalties.
If debt is stopping you from achieving what you want from life, there’s no time to waste. The sooner you eliminate debt, the more time you’ll have to build a positive credit history, which in turn will help you qualify for affordable loans, credit cards and – one day – that mortgage.
If you’re ready to break free from debt and start living your life, give DebtStoppers a call. Our bankruptcy attorneys can identify the most advantageous bankruptcy plan for your individual debt situation. Contact us today to schedule your free personal debt evaluation with a DebtStoppers bankruptcy lawyer.
Resources:
Young and Smart, But Millenials Face Homebuying Hurdles, by Les Christie, CNN Money
https://money.cnn.com/2013/10/31/real_estate/millennial-homebuying/index.html