When Ohio residents want to handle their debt, they may consider certain options that may not prove to be entirely beneficial. One option that some parties with credit card debt may consider is paying off the card with the highest amount of debt. However, if individuals goes this route, they may continue accruing debt due to the high interest rates on other cards that may have lower balances.
Another step that some individuals may look to is taking out a loan on their retirement accounts. Individuals could potentially borrow as much as half of the amount that is in their accounts, and then pay the money back with interest. However, the interest rates that an individual is likely to pay back may be considerably less than the interest that money invested in retirement could accumulate.
A third option that could also prove less than ideal is taking out a home equity loan. Individuals may think that the lower interest rates on this type of loan could help them take care of other debt while accruing less interest than with other types of loans. However, if individuals do not pay down all of their debts, they could find themselves paying off some debt, continuing to accrue debt through credit card use and risking the loss of their home in the event that the loan is not repaid.
If Ohio residents want to find debt relief options that could prove more beneficial, they may want to consider bankruptcy protection. The different types of bankruptcy options could help parties facing various financial conditions find a way to work toward more stable financial footing. Information on how to qualify for bankruptcy may help interested parties determine whether it could be right for them.
Source: fool.com, “3 Unwise Ways to Pay Down Your Personal Debt“, Matthew Frankel, Oct. 11, 2015