What is Debt?
Debt is defined as a financial situation or circumstance in which the amount of financial debt incurred outweighs any or all assets, income, or monies in possession of an individual. In many cases, the nature and severity of the various Types of Debt can vary in accordance with the stasis of the economy, the occupation undertaken by an individual, and the personal spending history of that individual.
Debt can be classified in a variety of methods, yet an initial indicator of the nature of specific debt can be primarily identified with regard to bankruptcy; the majority of debt incurred by an individual – or individuals – can be absolved upon claiming bankruptcy – however, federal debt cannot be erased regardless of a bankruptcy claim.
What are the Various Types of Debt?
The following are some examples of common Types of Debt:
The most common form of Federal Debt are educational loans, which are more commonly regarded as ‘student loans’; while the forgiveness of these Types of Debt were initially permissible as a result of a bankruptcy claim, legislation set forth during the presidency of George W. Bush prohibited this from continuing
Credit Card Debt:
Credit Card Debts are classified as Types of Debt that are incurred as a result of credit card usage; a credit card allows an individual user access to funds in the form of interest-based loans – in the event that an individual is unable to satisfy repayment, they may find themselves in this type of debt