Student debt often leads to Bankruptcy, lawyers findSubmitted by bobbyw24 on Wed, 02/08/2012 - 10:17
For an increasing number of young Americans, the postcollege journey leads to the office of a bankruptcy lawyer.
A report released Tuesday by the National Association of Consumer Bankruptcy Attorneys (NACBA) shows that more and more graduates and parents are turning to bankruptcy as their final option to deal with mounting debt.
Four out of five bankruptcy lawyers reported a “significant” increase in clients seeking help with college loan debt, and 40 percent said such cases have increased by at least 25 percent in just the past three years, the report says.
With college loan debt now surpassing $1 trillion and outpacing credit card debt for the first time in American history, many are beginning to see grim parallels between student borrowing and the subprime mortgage crisis that ultimately derailed the nation’s economy in 2008.
“You can take it from those of us who are on the front line of economic distress in America. This could very well be the next debt bomb for the U.S. economy. We can’t afford to do nothing about this,” NACBA President William E. Brewer told reporters in a conference call.