Pros and Cons of a Personal Loan

 

What are the pros and cons of a personal loan and filing for bankruptcy?
Profile photo for Tim Cella
Tim Cella
used to work at several law firms

A personal loan, in an oversimplified explanation, is a loan given to an individual by a bank or other lending agency. The borrower (the person taking out the loan) agrees to pay back the lender (the person or entity lending the money) with interest over time, usually monthly. Bankruptcy is a court order that erases some or all of your debts. If you file for bankruptcy and it's approved, creditors can't attempt to collect on those debts—they're written off. In some cases, you might even be able to get some of your property back from creditors.

I know from experience that each person is different. If you have so much debt that you will never in your lifetime be able to repay the debt, getting a personal loan will only hurt you and delay the bankruptcy case; however, that’s not always the case for everyone.

Perhaps for you, a personal loan has more benefits than bankruptcy. A personal loan is not only typically cheaper than filing for bankruptcy, but it also does not have any of the stigma that comes with declaring bankruptcy. Personal loans are easier to obtain and will likely be available with friendlier terms. If you want to keep your credit score intact(especially if you need a loan in the future), then this is something worth considering. Bankruptcy does have some advantages though. It does erase debt and can protect you from lawsuits for unpaid debts. It can also help when purchasing a home or car; however, many lenders will still require you to pay off outstanding debt before they’ll lend to you.

Your best next step is to speak with a bankruptcy lawyer. This one does free consultations.

https://docs.google.com/spreadsheets/d/1Id5W5ReIB2Wqncey2uf80wKPjc-hrTOt1OeGoVffbzw

Ascent Law LLC

8833 S Redwood Rd Ste C

West Jordan UT 84088

(801) 676–5506

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Ascent Law helps you in divorce, bankruptcy, probate, business or criminal cases in Utah, call 801-676-5506 for a free consultation today. We want to help you.
https://ascentlawfirm.com

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