Lack of Education Has Little Correlation to Bankruptcy

Do you still hear remember your parents telling you:

• “Education will open doors for you.”
• “Perform well in school if you want to have a good income.”
• “No one can take an education from you.”

All across the US, people are going to college and grad school in hopes of improving their financial situation. They are willing to go into debt by taking out student loans in hopes that a degree will get them a higher paying job, allow them to buy a house, or buy the things their kids want.

While no one can take an education from someone, a degree is no guarantee for professional or financial success. Take for instance, many unemployed law school graduates who cannot find jobs because they cannot pass a bar exam. How about those individuals who have passed professional exams, but are working at entry level positions outside their studies? A study by the Institute of Financial Literacy showed the rate of college graduates filing for bankruptcy increased by 20% recently.

This increase is partly based on the recession, but the increase indicates that filing for Chapter 7 or Chapter 13 bankruptcy has nothing to do with personal failure, guilt or lack of will power to control spending. There is definitely no direct connection between inability to pay bills and education. Many Chapter 7 and Chapter 13 filers have a college degree.

Education is not the source of financial struggle. Most people list outside factors as the reason for bankruptcy. These factors include:

• Getting sick and not being able to pay medical bills
• Losing a job
• Having to give up a job for health reasons
• Going through a divorce
• Business suffering from the recession

Filing for Chapter 7 or Chapter 13 bankruptcy is not about lack of education. It is about assessing a financial situation.

No matter your education, speak with a qualified New York bankruptcy attorney to make a decision on your financial future.