Understanding Variable Interest Rates
Variable interest rates can be very appealing; they reflect the market’s changing interest rate and can sometimes fall quite low. However, when the market interest rate rises, variable interest rates increase as well, sometimes to the point that debtors are unable to pay these higher rates. In fact, some people who file for bankruptcy do so because they are dealing with debt stemming from variable interest rates. The attorneys of the Russell Van Beustring P.C., see this affect numerous unsuspecting people every year, but we can help Houston debtors regain financial independence.
How Variable Interest Rates Can Lead to Bankruptcy
A variable interest rate might seem like a good idea at first, especially if the market interest rate is much lower than fixed interest rates at the time of your loan. However, your interest rate can fluctuate with the market, potentially forcing you to pay much more in interest than you are able. This, in turn, may lead to a difficult financial situation where you may have to consider filing for bankruptcy.
Of course, it is important to note that a variable interest rate is not always negative. With a market interest rate decrease, your own interest rate decreases, possibly allowing you to pay much less than you would have paid if you had chosen a higher fixed interest rate.
Contact a Bankruptcy Attorney in Houston
If you or someone you know has been subjected to the negative effects of a variable interest rate, the attorneys of the Russell Van Beustring P.C., may be able to help you get out of debt through Chapter 7 or Chapter 13 bankruptcy. Contact our offices today at 713-973-6650 to learn more about your options.