Bankruptcy Personal Debt – What is Bankruptcy Debt?
- June 18, 2021
- Will Turner
In economics, personal debt is simply the sum owed by consumers to creditors. It includes debts incurred for purchase of consumable goods and/or don’t appreciate very fast. In economic terms, it’s a debt that’s used to finance investment rather than consumption. It’s the money that someone makes payments on instead of spending it on goods and services themselves. While a lot of people are aware of the term, very few truly understand its meaning and how it relates to our personal finances.
In basic terms, personal debt refers to any money that you owe to someone else (including yourself) in payment of some transaction. The transaction could be in the form of bill payment, loan payment, or even a purchase. When this outstanding balance continues to exist, consumers are said to have accrued debt – and the more they accrue, the harder it becomes to pay back. Creditors may often claim and repossess the debtor’s property in case of failure to repay. However, they are only able to repossess the property in certain cases, so if you or someone you know may be threatened with it, then you might want to get in touch with a lawyer who specializes in repossession law. They might be able to help you figure out the legality of your creditor’s repossession claim.
Personal debt can affect virtually every aspect of your life. It may prevent you from buying that new car, keeping up with mortgage payments, or purchasing that new home. It may prevent you from building up that retirement fund or paying for college education. And if it’s at a point where your debts may be affecting your credit score (which will determine your eligibility for loans and credit cards), then bankruptcy may be an option. If it gets to this point, it might be time to consult experienced Pennsylvania bankruptcy lawyers (or others closer to you) who can work with you, understand your situation, and provide options for the way forward.
Personal debt, business debt, and credit card debt all fall under the category of unsecured debt. The only difference is that these types of debts do not have any collateral (such as a house) to secure them. This is why the three words “personal debt” are really just an umbrella phrase for all types of unsecured debt.
If you’re looking for business debt relief, you best option would be to use a debt collection agency. A debt collection agency can collect the debt on behalf of their clients and often will reach agreement with creditors on a reasonable payment plan. So, if you don’t want to have your wages garnished, you may want to consider contacting such professionals.
There is one disadvantage of using a debt collection agency though, that you may lose any legal protections that you may have had through your bankruptcy. Other than that, they can be a perfect solution for you to get your money back.
However, there are other options as well. One option is to contact your creditors directly. Some creditors are happy to work with you to find a payment plan that you can afford. If you owe more than seven thousand five hundred dollars and you have not been making payments on time for six months or more, then most creditors won’t negotiate. You can still pay back the amount over a longer period of time – it’s just going to take longer.