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More consumers making risky choices regarding debt

On Behalf of | Aug 7, 2020 | Debt Relief

Many in Pennsylvania are struggling to simply pay their bills and make ends meet each month. Due to a faltering economy, families are having to rely on loans, credit cards and financial help from friends and family to take care of even the most basic of expenses. As a result, it is more common for overwhelmed individuals to make risky choices regarding debt. These decisions could lead to trouble in the future.

Some consumers who are struggling financially brought debt with them into this recession. Whether it was from credit cards, student loans or debt from the last recession, this recent downturn in the economy has left many with little to no hope of managing their balances. While they still have debts to pay, they also have new bills to pay and needs to meet, and may have to rely on high-interest rate personal loans or credit cards to make it through this difficult time.

Taking on additional debt may seem like the only way out for some Pennsylvania consumers, but banks and other lenders are currently not as willing to lend. As a result, more are turning to types of debt that are not as highly regulated and more risky, such as payday loans, some types personal loans and high-interest credit cards. When financial prospects improve, many will be left with debt burdens they cannot hope to manage on their own.

Making risky choices now may seem like the only option, but it can lead to financial distress in the future. Those who believe they cannot manage their debt may consider the benefit of seeking protection through consumer bankruptcy. Chapter 7 is often helpful for those with significant amounts of credit card debt and other unsecured debt.