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Akin, Webster & Matson, P.C

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The possible risks of refinancing debts
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The possible risks of refinancing debts

| Jan 19, 2021 | Bankruptcy

After experiencing extended periods of financial turmoil, it might not be uncommon for individuals in Georgia and elsewhere to begin seeking out options to help stabilize their finances. In some cases, a person might feel that refinancing debts with credit sources that have lower interest rates could help provide immediate relief. While this might help in certain scenarios, sometimes it may only prove to be a short-term fix to a growing financial concern.

Experts indicate that one of the most common outlets for refinancing debts could involve seeking out offers from credit cards with periods of low to zero interest. However, if a person fails to pay off balances prior to the end of a temporary promotion, interest rates may soar to unexpected heights. Experts suggest that transferring debts to a credit account might not always be free and that any fees associated with the endeavor may only add to one’s hardships.

Other potential options could involve refinancing debts through personal loans or by borrowing from the equity of a home. While both options may be helpful in some situations, there could also be a variety of risks involved. Although it may also be possible to use retirement funds for relief from financial hardships, such an option could prompt devastating tax consequences.

Those who wish to seek a more long-term solution to the trials of monetary strain could benefit from weighing the possibility of seeking relief from debts through other available outlets. By speaking with a bankruptcy attorney, a person in Georgia could gain a better understanding of what is at stake and on how to make informed choices about the circumstances at hand. An attorney can advise a client on the possible advantages and disadvantages of each available option and assist in developing a plan to seek financial relief through the proper channels.

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