Bankruptcy allows a consumer to eliminate certain types of debt – Choice B. Filing for bankruptcy absolves an individual of repaying certain types of debt. This can either be credit card charges or personal loans. Simply, bankruptcy is the legal and official declaration of a person’s inability to pay any debts. The action is intended to notify all existing creditors of an unavoidable profit loss. It is not a means to temporary stop paying debts and neither does it help to establish good credit.
Though it is seen as a last resort, bankruptcy allows a consumer
A) temporarily stop paying debts.
B) Eliminate certain types of debt.
C) Easily re-establish good credit.
D) Receive credit in an emergency.