Should I take a personal loan to clear debt?

I owe $20,000 on a Chase credit card. I have not been able to make any payments in the last 4 months. I am scared that the creditor will soon sue me and put me into the jail. This is why I have decided to take out a personal loan of $25,000. The interest rate on the loan is 15%. The interest rate on the outstanding loan is $13.5%. My total income is $70,000 per year. Am I making the right decision?

2 Answers

Chase is not going to put you in jail; this is a civil matter, not a criminal matter. If they were to sue you, there would be absolutely no jail time. But, why let it get that far? Chase will be willing to work with you on a re-payment arrangement or a settlement. If you have the ability to settle the account, they will accept less than the full balance as payment in full.

I don’t think so. Taking out a personal loan for repaying the old debt isn’t a good decision. You can contact with your creditor and negotiate with them. You may try to arrange a better repayment plan with them. If it seems difficult to negotiate on your own, then you may get help from a professional debt relief company.

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