Variable Interest Rates Leading to Bankruptcy
Whether making a large purchase, such as a house, getting a credit card, or obtaining any other type of loan or line of credit, you will either take on a fixed or variable interest rate. Both types of interest rates mean that the loan company will charge you interest on the loan over a period of time, but a fixed rate will remain unchanged over time while a variable interest rate, on the other hand, can change over time. Unfortunately, for individuals who have taken on loans that have variable interest rates, these types of interest rates can come with many dangers and can eventually cause a person to experience financial strain and potentially the need to file for bankruptcy.
Dangers of Variable Interest Rates
Variable interest rates can cause future financial problems for individuals simply due to their ability to change. Additionally, variable interest rates can present several other dangers for individuals, including:
- Unpredictable increases in interest rate
- Inability to pay bills because of interest rate increases
- Financial insecurity due to unknown future rates
While a variable interest rate could potentially benefit a borrower if interest rates fall, when interest rates rise unexpectedly, a person may find themselves with serious debt, forcing them to consider their options for paying it back. In this situation, bankruptcy is often the most viable and beneficial option.
Talk with a Bankruptcy Attorney in Raleigh
If you are struggling with debt brought on by a variable interest rate and live in Raleigh, talk with an experienced attorney at the Bradford Law Offices by calling 919-758-8879. We can help you evaluate your options and choose the best path for getting your financial security back.