Navigating Personal Loans, Debt Consolidation, and Bankruptcy

Thank you for joining me for my latest YouTube video. Remember, you can see all my videos on my channel. In this video, I’ll discuss the issue of personal loans and bankruptcy, including the benefits of debt consolidation with credit cards to improve your credit score. But there are pitfalls to worry about as well.

So here’s a quick summary of what I discuss in the video.

Personal Loans for Debt Consolidation and Improving Your Credit Score

One issue to consider is that personal loans can be a valuable tool for saving money. You can consolidate high-interest credit card debt into one loan with a lower interest rate. This could result in substantial savings. A credit card balance transfer could also be considered if you don’t qualify for a loan. Most credit card companies offer an introductory rate on balance transfers, sometimes as low as zero percent. So imagine how much money can be saved by not paying interest for six to twelve months!

Another benefit is that personal loans are more difficult to get than credit cards. So this helps increase your credit score. Also, personal loans are known as installment loans, while credit cards are considered revolving credit.

Potential Issues with Loans

Now, there are issues to be aware of. The first is the temptation to use readily available credit. Since your debt was consolidated with a loan, your credit card balance is zero. But whether it’s a temptation or an emergency, this can lead to falling back into debt. This could leave you in a worse financial situation because of the increased debt of credit cards and personal loans.

Personal Loans and Bankruptcy

Another issue discussed in this video is eliminating personal loans in bankruptcy. While personal loans can be discharged in bankruptcy, the timing, the amount of the funds, and what those funds were spent on are important.

Personal Loans and Credit Cards: Dividing Debt in a Divorce

This issue should be discussed in detail with the bankruptcy lawyer. For example, if the loan was used for non-essential expenses like a vacation or other luxury goods, that could be an issue for the bankruptcy trustee. Sometimes, the bankruptcy filing has to be delayed, and payments continue on the debt to avoid problems with the trustee. I use an example of one of my clients to further elaborate on the issue.

I hope you enjoyed the video. Feel free to subscribe to my YouTube Channel.

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• Bankruptcy
• Your Wallet

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Remember that the information posted on this site and my videos are to be considered for information purposes only and are not considered legal advice.