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Common Concerns & Questions About Bankruptcy

Personal loans can’t always eliminate debt

| Jul 3, 2019 | Chapter 7 |

Facing overwhelming debt can be terrifying. Not only can it prevent an individual from reaching important milestones, such as buying a house or getting married, but it can also affect one’s day-to-day life. Far too often, Texans struggle to make ends meet as they fight to stay on top of their debt. This is simply unacceptable and it’s no way to live. That is why these individuals need to carefully consider their debt relief options.

Some people try to pay off debt by consolidating it through a personal loan. These loans are not secured by property. This means that an individual who is unable to repay a personal loan will not have their property repossessed. However, because these loans are unsecured the interest rates associated with them are often much higher. This can make it even more challenging to pay off the loan’s principle.

There are a number of factors that are taken into consideration when determining a personal loan interest rate. And individual’s credit history, employment history, debt to income ratio and income can all be determinative factors. Yet, even those who secure a lower interest personal loan can still struggle to keep up with payments, because these loans typically have a short-term payment period.

So what are Texans to do? They consider can personal loans and other debt relief options, but if they find that doing so is merely putting off the inevitable, then they should carefully consider whether personal bankruptcy is right for them. Chapter 7 and Chapter 13 bankruptcy are a very real ways to eliminate debt and secure a fresh financial start. By discussing these matters with a qualified legal professional, these individuals may be able to start down the path toward true debt relief.