Overwhelmed Tennessee homeowners may look to various sources for help when they are facing debt they can no longer manage. For some, it may seem like a reasonable solution to tap into their home equity to pay off debt and address specific balances. However, this is not always the most prudent option for debt relief as it can continue to trap a consumer in a cycle of debt.
A home equity line of credit can provide an applicant with disposable funds to address certain needs. A consumer can pay medical bills, pay down credit card balances and take care of other financial concerns. A survey of those who took out a home equity line of credit and paid it off later borrowed against their equity again in the future.
A closer look at those who tap into their home equity found that those who take out these lines of credit take about three years to pay them off. These can be risky for financially insecure homeowners because the interest rate can be high, and it uses an applicant’s home as collateral. It’s an easy way to borrow money and access cash, but it does not always solve financial concerns as some may hope.
For someone in Tennessee looking for long-term debt relief, it may be useful to consider the benefits of consumer bankruptcy. This process allows for the discharge of certain types of balances or a repayment of reorganized debts over a period of time. To learn more about which bankruptcy option is best and how it can stop a debt cycle, a consumer may want to seek a thorough evaluation of his or her case.
William E. Maddox, Jr. LLC, Attorney at Law is located in Knoxville, TN and serves clients in and around Knoxville, Oak Ridge, Louisville and Anderson County.
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