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Bankruptcy: Using a personal loan to pay off debts

Many families in California and across the nation have experienced the hardships of dealing with substantial amounts of debt. Similar concerns can have a disastrous impact on one's life and may leave a person scrambling through options for relief. While many could be eligible to pursue relief through outlets such as bankruptcy, studies indicate that some may instead choose to seek aid through personal loans.

Recent studies suggest that many individuals have taken to applying for personal loans for assistance in paying down on other high-risk debts. According to studies, more than 60 percent of loan applicants over recent years intend to use this line of credit to pay down on other forms of debt. Studies also indicate that the average balance for those who take out a loan for relief comes in at just over $14,000.

While using one form of debt to pay off another may seem counterproductive, some may feel that there are advantages to consolidating their debts through a personal loan. The interest rates on these lines of credit could be significantly lower than the alternative. However, those who are unable to keep up with the payments on a loan may find that it could only act as a short-term solution to a growing problem.

With a variety of options to choose from when dealing with substantial levels of debt, choosing the best outlet can be a daunting task. Those who wish to obtain guidance in making informed decisions about their financial futures could benefit from consulting with an attorney as soon as possible. A bankruptcy attorney in California can examine a client's financial situation and assist him or her in developing a strategy to reduce or eliminate debts through the proper channels.

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