Your 20s can be a time of great financial challenge: You're not quite skilled enough to get the job of your dreams in the "real world," yet you have real bills and financial responsibilities that demand a salary you can't command. Worse yet, you may be contending with a mound of student loan debt, credit card bills, car payments and other income drains. While filing for bankruptcy may seem like an easy way to end the nightmare of debt in your 20s, it's not a solution. In fact, it will very likely cause you more pain than relief in the long term.

It Won't Wipe the Slate Clean
A recent Pew Research Center analysis indicated that a record one in five U.S. households is carrying some form of student loan debt. To make matters worse, recent college graduates are facing a tough economy where job offers are hard to come by. The ability to negotiate a competitive salary among many other equally qualified applicants is limited and difficult.

Filing bankruptcy won't solve a thing if student loan debt is partially to blame for your financial woes. In 2005, the Supreme Court ruled in favor of the government's ability to collect defaulted student loans by "offsetting Social Security disability and retirement benefits without a statute of limitations." Not only will bankruptcy not wipe away your student loan, but the government can garnish 15% of your social security retirement benefits if you don't pay.

You're Neglecting the Real Issue
Most people in their 20s obtain that first "real" job, first "grown up" apartment and learn how to make the sacrifices required to live within their means. You should spend your 20s developing the skills and discipline required to be a responsible and self-sufficient adult. Those who learn how to manage money during this time will learn to build the savings required to make a down payment on a future home, buy cars without the help of a lease or high-interest loan and eventually afford the joys that real financial freedom offers, such as frequent vacations or early retirement.

When you've dug yourself into a financial hole early in life, there is no easy solution. You must dig yourself out of that hole. Some ways you can do that is by taking on a second job, eliminating unnecessary spending and paying each bill, little by little. It won't be a fast or fun process, but you will emerge from the experience with the skills necessary to be better with money in the future. In "The Truth About Debt Consolidation," personal finance expert Dave Ramsey states that, "78% of the time, after someone consolidates credit card debt, the debt grows back." The reason is that the spender never learns how to manage money. For the same reason, bankruptcy won't solve your problems, unless you address your financial behavior.

You Could Hurt Your Job Prospects
Depending on the type of bankruptcy you file, a record of your bankruptcy can be on your credit report for seven to ten years. Many employers have no interest in checking your credit score, but you give them the right to when you approve a background check. If you plan to work in any position involving the handling of money or even in non-financial roles within the insurance, finance, law or academic industries, your credit will likely be one facet of your background check, and it could deem you ineligible for a job. Why does it matter? According to human resources expert Lisa Rosendahl, how a person manages his or her own personal finances is an indicator of how he or she will manage someone else's.

You Could Become Homeless
Once you file bankruptcy, the option to buy a home is usually "off the table," for seven to 10 years. More importantly, filing bankruptcy may lead to a future filled with declined rental applications. Many landlords will check your credit before they approve you for a lease arrangement, and having a bankruptcy is a red flag that you could be a risky tenant who won't pay rent.

Credit Will Be More Expensive and Limited
Once the seven to ten year time period has passed on your bankruptcy, you'll have to work hard to raise your credit score. You will face limited access to credit and very high interest rates for quite some time until you can rebuild your financial reputation.

The Bottom Line
Your credit score may not be at the top of your mind, but it plays a role in many functions you don't expect, including what you'll pay for car insurance, where you can live and the rates you're given for credit cards. Paying down debt isn't an easy process, but neither is bankruptcy.

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