{"id":22170,"date":"2025-11-12T22:30:24","date_gmt":"2025-11-12T22:30:24","guid":{"rendered":"https:\/\/incredipros.com\/?p=22170"},"modified":"2025-11-12T22:30:26","modified_gmt":"2025-11-12T22:30:26","slug":"for-young-people-in-debt-bankruptcy-seems-like-a-get-out-of-jail-free-card-is-it","status":"publish","type":"post","link":"https:\/\/incredipros.com\/?p=22170","title":{"rendered":"For Young People in Debt, Bankruptcy Seems Like a Get Out of Jail Free Card. Is It? |"},"content":{"rendered":"
\n

When Whitney Catalano filed for Chapter 7 bankruptcy in 2022, she was self-employed, living in an apartment she couldn\u2019t afford and carrying $60,000 in credit card and personal loan debt. For her, bankruptcy looked like freedom.<\/p>\n

\u201cI felt very overwhelmed by money,\u201d she says. \u201cI wanted to clear myself of this chapter and really restart from a clean slate.\u201d<\/p>\n

\n
<\/figure>\n
\n

Catalano is one voice in a chorus of TikTok accounts lauding bankruptcy. It goes something like this: People in their 20s and 30s film their stories of filing for bankruptcy, calling it the best decision they ever made. Or in modern meme talk: \u201c\u2018You look happier.\u2019 Thanks, I filed for bankruptcy.\u201d<\/p>\n

Now 32 years old, Catalano says she\u2019s built a good credit score and been able to secure apartments and new credit cards that she pays off. She owes no debt.<\/p>\n

Bankruptcy might sound like a golden ticket out of debt, but there are consequences. And TikTok certainly shouldn\u2019t be your primary source of financial advice. I talked to a lawyer and a credit counselor to learn about alternatives to bankruptcy and what to know before filing.<\/p>\n<\/div>\n<\/div>\n

Bankruptcy filings are on the rise<\/h2>\n

Data shows the TikTok trend is indeed playing out in real life.<\/p>\n

While the U.S. Bankruptcy Courts reports overall bankruptcy filings are much lower today than in the early 2000s \u2014 for example, around 310,600 Chapter 7 filings in 2024 versus 1,139,600 in 2010 \u2014 numbers are up since the Fed raised rates in 2022.<\/p>\n

Student loan payments are due again. Inflation remains stubbornly high and holiday spending is around the corner. The job market is cooling. Housing costs are up.<\/p>\n

Janet Swope, credit counselor of 30 years, runs an agency that offers a state-approved course for people considering bankruptcy. Her client list grows each year, and that includes a recent uptick in younger clients.<\/p>\n