Bankruptcy used to be the solution to ALMOST all financial woes. A person used to be able to just file bankruptcy and usually they would be approved to do so with little hassle. However, times have changed.
New bankruptcy laws now put a lot of limits on bankruptcy. You should probably understand these limits if you are considering bankruptcy and have any loans in default.
Student Loans
One type of loan that you can not write off in a bankruptcy is a student loan. You will not be able to wipe out student loan debt at all. The only way to get rid of it is to pay it off. If you’re in default on a student loan, talk to your lender. They will typically be very helpful at helping you get back on track.
There are other loans which may also not be wiped out by bankruptcy. You really should check into the rules before filing if loan debt is a concern for you. Read the fine print of all loans and talk to your lenders when you have financial difficult.
Bankruptcy should not be a financial solution. It should only be used when absolutely needed and misuse of the system caused law reform so be sure you understand your rights and your responsibilities with loan debt.
