Ever hear debt referred to as good? There are certain types of debts out there that are labeled good while others are labeled bad. At the end of the day, even those good debts can cause problems for Illinois residents who find themselves in a bad financial way. A Chapter 13 bankruptcy, if approved, can help make it easier to pay down debt, regardless if it is thought of as good or bad.
What is considered good debt? Good debt is any type of financial account that will build up one’s credit. A financial planner quoted in a recently published article called this type debt: that which creates future opportunity. A few examples of good debts include mortgages, student loans and auto loans. Bad debt, debt that creates future problems include excessive credit card debt, payday loans, tax debt and costs incurred for elective medical procedures.
People go into debt for a number of reasons. There are the select few who simply overspend, but most people experience some sort of hardship in their lives that can make good debts bad ones in no time. They lose their jobs, they have family emergencies, they experience medical problems — in other words, life, in general, seems to be working against them. Debt is nothing to be ashamed of and it is something one can get under control with help.
Illinois residents who have found themselves struggling financially but still have some level of income coming in may feel that they have few debt relief options available to them. That is actually not true. There may be a number of approaches they can take to tackle their debt, a Chapter 13 bankruptcy filing is just one of them. Legal counsel can review one’s situation and offer insight as to which debt relief option would best benefit one’s circumstances.