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Personal loans on the rise, may spur Chapter 7 filings

Virginians often have to turn to financing to accomplish their goals in life. Whether it is buying a house or a car, going on vacation, or even paying other debt like medical expenses, many individuals have to take out one or more of a variety of loans to ensure they can make ends meet. Although personal loans have become easier to obtain, they can pose a financial threat to those who are on unsteady financial footing.

In fact, many economists are worried that Americans are turning to personal loans to frequently, with more than 20 million people currently carrying a balance. According to Equifax, the number of personal loans issued over the last year has increased by 10%. Perhaps of even greater concern is the fact that the average personal loan balance currently stands at more than $16,000, which is on par with average credit card debt. Personal loans in excess of $30,000 have also increased significantly, a staggering 15% over the last five years. Many attribute the increase to easy access provided by a number of mobile apps, but economists are worried that more Americans are going into debt at a time when the economy continues to improve.

Personal loans can be one step down a debt spiral that threatens an individual’s ability to remain financially stable. Sadly, far too many people find themselves unable to pay these loans back in accordance with their terms, which can lead to the need for more financing. This can lead to penalties, delinquencies, and legal actions.

The good news is that those who are struggling with personal debt, even debt arising from personal loans, may be able to secure debt relief. Chapter 7 bankruptcy, in particular, may be appropriate for those dealing with unsecured debts like credit card debt and personal loans. To successfully navigate the Chapter 7 bankruptcy process, though, individuals need to know the law and how to utilize it to their advantage. Competent legal professionals know how to do this, meaning they can prove invaluable when seeking bankruptcy protections.