Deciding to file for bankruptcy, either for your personal finances or for your business, is not an easy decision. Thankfully, there are plenty of helpful resources at your fingertips, so it’s important to do your financial homework first before deciding to file for bankruptcy.
Image Courtesy of zingbot via Flickr.
The good news is that most debts can thankfully be discharged in a bankruptcy filing, especially pesky consumer debt. But it’s true that knowing exactly when to file is a difficult decision, and one that you should make with your family and loved ones nearby to help you through the process. A trusted team can even help you get rid of payday loan if you file for bankruptcy. Payday loans often come with high fees, so getting rid of them could mean a great relief on your financial woes. Fortunately, figuring out which debts are dangerous, and which ones are safer is as simple as looking through our comprehensive list. Below, take a look at the list of loans which can be discharged in bankruptcy.
Consumer debt is the most dangerous kind of debt that a bankruptcy court might not find favorable. When considering filing for bankruptcy, it’s crucially important to pay off as much consumer debt as possible before proceeding with an attorney for a more favorable outcome. Consumer debt included credit card debt, car loans, bank loans for mortgages and home improvement projects and even cell phone bills and outstanding utilities. These can typically be discharged in bankruptcy court, but for a fine.
Personal debt might not necessarily be able to be wiped clean in bankruptcy court. The truth is, personal debt is more than a financial hardship. It can cause emotional rifts between families and friends. A personal loan is any amount of money borrowed from a friend or loved one—with or without a paper trail—and might count as a strike against your financial record.
Student Loan Debt
Student loan debt is “healthy” debt—that is—a bankruptcy court will look favorably upon it. However, student loan debt can never be discharged through a bankruptcy filing, so it’s important to pay it off as quickly as possible.
It can be tricky to educate yourself about bankruptcy laws before you decide to file, which is why it’s important to equip your family or business with the right tools and breadth of knowledge before financial hardship strikes. The economy is uncertain, and even in the best of financial times, no future is ever guaranteed.