0024 - Debt Related Queston: Bankruptcy Question # 0024

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QUESTION #0024:

I am currently a school and I have been declined for credit based upon my summer employment earnings. How can I avoid bankrupcty and pay for my schooling?



ANSWER:

As to how to complete your schooling without going bankrupt, this is an issue that has become more prominent in recent years. More people are finishing their education under insurmountable debts. Realistically, the best option is to not accrue the debts. A long-term budget, planning out the costs of school and living, the amount of credit to use, and your repayment plan should be written out before incurring the debt(s). Donít assume that you will obtain a high-paying position immediately upon graduation, and therefore base your ability to repay debts on an income that doesnít yet exist. Ask yourself when applying for credit what you plan to use it for. Credit is supposed to be a convenience, not a replacement for income. Tuition and books, etc, should be paid from Student Loans (if you have these loans), and living expenses from employment income. Sometimes this means living cheap and working close to full-time plus attending school. Another option is to attend school part-time year round while working. An evaluation of what you need, and what you can afford is a necessity. Your core budget should consist of rent/utilities, food, and transportation. A budget worksheet, to draft out what you can afford and examine your needs, is available for free on our website.