I’ve met with a great deal of debtors in recent months who have had no alternative but to file bankruptcy because of the interest rates they are paying on their debt. And when these loan companies refuse to lower their rates so they can pay down their principal, it forces the individual to pick up the phone and call our office. It’s a trending scenario with higher and higher interest rates. I have seen interest rates as high as 48.5%.
It is with understanding that the people knew the interest rate before signing for these loans; but with high expectations comes the knowledge that desperate people will do desperate things to keep their homes afloat. These rates are a short term financial fix for a long term debt problem.
It usually happens though after struggling to make payments to these high interest loan companies that the individual’s hand is forced and they have no alternative but to seek protection from their creditors through bankruptcy or a consumer proposal.
I advise debtors that these should be warning signs, for them to remember, down the road when trying to rebuild their credit.