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Possible adversity tied to debt consolidation loans

On Behalf of | Sep 28, 2020 | Personal Bankruptcy

Upon experiencing dire financial straits, it’s not uncommon for Louisiana residents to consider a variety of outlets for relief. In some cases, similar concerns could leave a person wondering if debt consolidation might be viable. Certain risks are associated with seeking debt relief through consolidation. Such a decision might not always prove favorable, or even helpful, and other options such a bankruptcy could be just a tool to help safeguard one’s financial future.

Possible debt consolidation issues

One of the most enticing aspects of seeking relief through debt consolidation may pertain to the idea of saving money by lowering monthly payments and overall amounts due. However, this might not always be the outcome, and there are scenarios in which consolidation could lead to either higher monthly payments or extended periods of repayment. With longer repayment periods, interest rates on consolidation loans could leave a person paying a much higher amount than previously owed.

Consolidation loans may also come with a set period for repayment, and failing to pay off such loans by this date could bring about dire repercussions. There is also a chance that those who seek relief through similar means may face other risks, such as being enticed into using a newly freed-up credit card balance for everyday needs. Such decisions may only leave one facing more profound financial struggles in the future.

Bankruptcy can be a saving grace for individuals in debt

While filing for bankruptcy is a significant financial decision, it could also be just the tool to help a person seek relief from the trails of debt. Those who feel uncertain of how to choose the correct path for debt relief could find it helpful to obtain legal counsel for insight on all their available options and the potential advantages and disadvantages of each outlet. 

By seeking such guidance, a person could become better prepared to protect his or her financial future by seeking debt relief through the proper channels.