A Baltimore bankruptcy, divorce and personal injury attorney with more than 18 years of experience.

Analyzing the possible downsides of certain forms of debt relief

On Behalf of | May 14, 2021 | Bankruptcy

When financial challenges arise, many individuals in Maryland and elsewhere may find it helpful to know that there may be various options with which to help address the situation. However, while some of the available options may seem appealing at first glance, they might not always prove favorable in every situation. Addressing some of the potential downsides to seeking debt relief through outlets such as balance transfers or loans could help a place a person in a better position to protect his or her financial future.

Transfers and loans

Experts indicate that balance transfers continue to be a popular option for many individuals, but there could also be some disadvantages to a similar path. For instance, a new account might come with a period with little to no interests, but this might not last long and failing to pay off a balance before this promotion ends could bring about dire ramifications. Balances transfers could also free up credit limits on other accounts, which may create deeper concerns for those who continue to use accounts for purchases.

While it might seem as though the lower interest rates of certain loans could make this a more favorable path, things might not always turn out as planned. Those who struggle with financial challenges might not always qualify for lower rates, and the payment period of similar paths could linger on for extended periods. Using a loan to pay off credit card debt could also bring about similar risks as balance transfers by freeing up credit limits for future use.

Long-term relief

While similar options could provide temporary debt relief, sometimes, a more long-term solution might be the best path. Individuals in Maryland who wish to better understand their available options could benefit from consulting with an attorney for advice in making informed decisions. A bankruptcy attorney can address a client’s situation and assist him or her in creating a plan to reduce or eliminate debts through the appropriate outlets.