Bankruptcy before medical school

[Valiant-Effort]

Hello Everyone,

In 2023, I was involved in a car accident and was found at fault. Unfortunately, I was underinsured, and now the car insurance company of the person I hit is suing me. I have a lawsuit trial in November, but my lawyer isn’t doing much, so I'm in a difficult situation. Regardless of the details, it looks like I will owe around $15,000 + another $2k. I don't have the money to pay this obviously, and they've threatened to have the DMV revoke my license if I don't pay, which they can legally do. Also, I'm currently studying for the MCAT, so I can't get a job to repay them.

As a result, I will need to file for Chapter 7 bankruptcy. I'm wondering how filing for bankruptcy will affect my ability to get loans in the future for medical schools. Will it increase my interest rates? Will I even be able to get a loan? I figured that bankruptcy won’t matter much since it will be around 10 years before I need a mortgage, and by that time, I will have completed medical school. Anyway whats your advice. Thanks.

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[Hollow Knight]

I don’t think it will affect your ability to take out federal loans.

Private loans? Yeah you probably couldn’t get those, most of them check your credit score etc

 

[Mr.Smile12]

Blowing dust off the post

Bankruptcy? NO MED-SCHOOL FOR YOU!!!

Hello everyone. I was just wondering does bankruptcy on a credit repeort disqualify someone for getting in med-school? Is there any schools out there that base competitiveness on this criteria? Or, does anybody know if med-schools are going to use credit scores as a criteria in the future...

forums.studentdoctor.net

Impact of a bankruptcy on financing medical school (MD program)?

What is the impact of a personal bankruptcy (by the student) on financing medical school (MD program)? After a bankruptcy, how long will it take to get private loans again? Is it possible to attend without private loans? Cosigners are not available.

forums.studentdoctor.net

 

[Nontrad_FL_LGBT]

Don't file bankruptcy over $17k dude. Get a private loan if you need to and literally do Uber or work at McDonalds in your free time next year to pay it off. This is also assuming you even lose the trial and are forced to pay their asking price which isn't an assured thing. You can definitely acquire $17k working over the next 12 months. A bankruptcy will impact your ability to get private loans in the event of an emergency or to cover any gaps in COL that public loans won't. Not a risk I'd be happy to take.

 

[LizzyM]

Better to delay MCAT and application cycle for one year than to declare bankruptcy which will follow you for 7 years. That could have long term effects on your ability to rent an apartment during residency and all kinds of other things. Push this all off and earn money to pay this off.

 

[abolt18]

Hello Everyone,

In 2023, I was involved in a car accident and was found at fault. Unfortunately, I was underinsured, and now the car insurance company of the person I hit is suing me. I have a lawsuit trial in November, but my lawyer isn’t doing much, so I'm in a difficult situation. Regardless of the details, it looks like I will owe around $15,000 + another $2k. I don't have the money to pay this obviously, and they've threatened to have the DMV revoke my license if I don't pay, which they can legally do. Also, I'm currently studying for the MCAT, so I can't get a job to repay them.

As a result, I will need to file for Chapter 7 bankruptcy. I'm wondering how filing for bankruptcy will affect my ability to get loans in the future for medical schools. Will it increase my interest rates? Will I even be able to get a loan? I figured that bankruptcy won’t matter much since it will be around 10 years before I need a mortgage, and by that time, I will have completed medical school. Anyway whats your advice. Thanks.

I worked full time through all of undergrad, including while I studied for the MCAT. Go get a job, especially this summer, and make 15-20K. It's very doable. When you get off work, go to a 2nd job. If that means delay the MCAT, so be it. Getting this out from behind you the right way is worth it. $17K is NOT worth bankruptcy. Target is paying $20/hr. Go get a job there during the day and get a job in the evenings flipping burgers (also paying $15-20 many places). You could earn all the money you need in only a couple months.

Again, filing bankruptcy for $17K is stupid. It is the wrong answer. There is a way out and it's call hard work.

 

[Dral]

Agree with above. I don't say this to make you feel bad, but to put into context for your hopeful future self: That amount is how much you might make as an attending in a month. That is NOT worth declaring bankruptcy over. You can work and get out of that. Someone might argue that if you delay a year, that is a year less of attending salary over the course of your life. We can discuss a cost-benefit analysis, but I feel if you work hard enough, you can get out of this and avoid the potential headaches along the way that would result from declaring bankruptcy now.

Also, is it too late to switch lawyers? It seems like you're not happy with what they are doing.

 

[RangerBob]

I also agree with the above. $17k isn't worth filing for bankruptcy.

I agree perhaps you need a new lawyer. If you're truly at fault, why is it even going to trial? Settle for a lower amount and save everyone time/money/hassle (unless you think you can win at trial)

It looks like (from google--you will want to delve deeper) bankruptcy may disqualify you from getting Grad Plus loans, which would essentially mean you can't go to medical school because just about everyone needs grad plus loans.

Also, bankruptcy stays on your credit for quite a while, which could impact your ability to buy a home when you're an attending. Depending on how long your residency is, this may or may not be an issue.

 

[Stuaccount]

Repeating what everybody else said because it cannot be said enough times: Don't file for bankruptcy.

I figured that bankruptcy won’t matter much

No, this isn't true. It matters a lot, especially since it will be most impactful during the years when you will need a clean credit history the most.

It will affect not only the loans you have access to for education but other things such as your ability to rent apartments (think of how many times you may need to move in the next 10 years and beyond). Bankruptcy is an absolute last resort and you are nowhere near there.

I second putting off medical school and working to pay off the judgment (IF it happens). Also try to look around for free legal help or financial planning. You definitely need access to better advice.