The VideoLAN Forums

Sometimes I load a bunch of videos to watch on VLC by right clicking on a folder and clicking 'play with VLC media player'. The problem is sometimes there are files like pictures, txt, or simply corrupt files, and VLC cannot play them but get stuck trying to load them. Is there an option or feature to detect if a file is unplayable and skip it / move onto a new file?

No, there is no such possibility. In contrast to many other programs, the VLC does not judge a file after the name extension.
But you can enter name extensions in the Advanced Preferences -> Input / Codecs -> Access modules -> File -> Ignored extentions, which should be ignored by the VLC.

For example, you can rename a video file "Video.mp4" to "Video.abc", and the VLC will accept and play this file, because "abc" is not listed under the "Ignored ectentions".

Thanks that's what I was looking for.

In newer VLC version (such as 3.0 and higher) you can find this option in :
Advanced Preferences => Playlist => Ignored extensions
Here you can add for example .lrc extension to skip lyrics files and other such things