Bankruptcy Is A Great Solution For Some Situations, But Not For All
Bankruptcy is something that is designed to give people relief from debts so they can start over; however, bankruptcy does not help with all types of debts. There are certain types of debts that bankruptcy will not help with, and you should find out if your debts will qualify before you decide to file. If most of the debts you have cannot be included in your bankruptcy, you may want to consider choosing a different path to financial freedom.
Why can't all debts be included?
Bankruptcy law was designed to help people who get themselves into trouble with credit cards, medical bills, and other types of debts like this, but it was not designed to help them get out of certain types of debts that are called priority debts.
Priority debts are the type that a person must always repay, and this is because these debts are very important types of debts. Tax bills are one of the most common types of debts that fall into the category of priority bills. Student loans also fall into this category, as well as child support and alimony debts.
What should you do if most of your debts are priority debts?
Before you decide to file for bankruptcy, make a list of every debt you have, and divide the list into priority debts and non-priority debts. If your list contains mostly non-priority debts, visit a bankruptcy lawyer to find out if filing for bankruptcy would be the best route.
If your list contains most priority debts, you can still seek help from a bankruptcy lawyer; however, the lawyer is not likely to suggest filing for bankruptcy. Instead, he or she might try to look for alternative solutions for your debts.
For example, if you owe a lot of money to the IRS, the lawyer might be able to help you with an Offer in Compromise (OIC). This is one option you can use to settle a tax debt for a lower amount. While you could do this on your own, it is often easier and more successful if you hire a lawyer to help you.
If you are struggling with major student loan debts that you cannot repay, your lawyer might be able to help you find a debt forgiveness program that can help you eliminate some or all of your student loans.
Filing for bankruptcy is a great solution for many people, but you should always seek advice from a bankruptcy lawyer before making the decision to go through with this.