When you’re struggling with overwhelming debt, it can be difficult to know where to turn. It may seem like the least complicated way to pay off your bills is to ask for a loan from a family member. However, what happens if this proves to be just a temporary fix?
Discharging debts through bankruptcy
A successful bankruptcy filing will discharge most of your outstanding debt. Secured debt usually can’t be discharged. When you borrow money from a relative, it’s probably not secured by any of your assets. This means that you will probably be able to discharge this loan through bankruptcy.
At first glance, this may not seem like a significant concern. However, take the time to put yourself in your relative’s shoes.
You generously provide a loan to a loved one. You expect that you will see that money again at some point. You find out later that the loan is legally discharged. You can probably forget about recovering your money. It is easy to see how this situation can fray even the strongest family relationship.
Debt relief help is available
It can be scary to think about filing for bankruptcy. However, it is a viable means of getting a fresh financial start. It does not mark you as a failure, and it is not something that will define you for the rest of your life.
When you are already struggling with debt, asking for a loan from a relative is likely to be a Band-Aid solution at best. It is better to explore your legal options for addressing your debt problems, including the possibility of filing for bankruptcy. A skilled professional can provide you with the information you need to take the best path forward for your life.