Many middle-aged or older Americans have to file for bankruptcy when they can no longer pay their mortgage or need to get rid of credit card debt that has become overwhelming. But what about those that are in their 20‘s, fresh out of school, owe student t loans and don’t have a job? If this is you, you may be thinking that you need to start your post-college career by filing for bankruptcy just to make it through. According to Investopedia, the 20’s are a hard set of years financially. Most 20-somethings don’t have the work experience to be making high amounts of money, and yet they have the same bills and financial responsibilities as all older Americans. When a young man or woman is hit with an overwhelming amount of bills that their salary can’t cover, bankruptcy may seem appealing.

Some young adults aren’t the best with their money, and may rack up high amounts of credit card debt when they are scrambling to earn money. They may have rent due, utilities bills to pay, phone bills to cover, and more expenses then they know what to do with on a meager starter’s salary. Yet finance experts say that even when things seem hopeless, it’s not the best idea to declare bankruptcy this early in your life. In fact, rather than being helpful, it could be very damaging. This is because bankruptcy won’t wipe your slate clean if you file this young.

Your student loans will probably not be discharged, which means you will still need to earn the money to pay them back with interest. According to a 2005 Supreme Court ruling, the government cannot discharge these loans, and can even garnish 15 percent of your Social Security retirement benefits if you fail to pay up. One in every five households is carrying some form of student loan debt, and college graduates are now facing a tough economy where job offers are very hard to come by. In a tough market, employers are able to choose an experienced older citizen with an impressive resume who will take the same salary as a college graduate with a bachelor’s degree.

In your 20s, you may have to sacrifice a lot to keep from going under. This may mean adding roommates even when you live comfortably alone, cutting back in expensive nights out, scaling back by buying a cheaper car, and making dozens of other little sacrifices which will help you to scrape and save to pay off the mandatory expenses. If you file for bankruptcy early on in life, it can hurt your job prospects. You should consider this before you decide to file, because it will show up on your credit report for up to 10 years. Because some employers will look at a credit report when hiring, you may want to steer clear of that decision. As well, once you file for bankruptcy you can’t get a mortgage for the next few years. If you are planning to get an apartment, you may end up with declined rental applications.

This means you could end up moving back in with mom and dad or be homeless as a result of the bankruptcy. Also, your credit will be more expensive and limited following a bankruptcy. You will have to work very hard to raise your credit score following your bankruptcy filing, and will need to take pains to rebuild your financial reputation. Bankruptcy can be a fresh start to older and middle-aged Americans, but if you are just starting out, talk to a bankruptcy attorney about other options that won’t have such a negative effect on your reputation.