Well, I have to clarify that personally I have never had any loan or debt in my life so this thread has nothing to do with my experience but intends to find out how people in loan/debt deal with the problem. Let's say you take loans from a bank and sometimes for whatever reason, you can not pay the debt on time, then you borrow money from other channels. Sure this works for a certain period but later bad things may happen, you have to postpone the payment and struggle with finances again. Isn't this a vicious circle ? How would you deal with the problem ? I am all ears.
Many people work this way, and not only people, look at the states that keep going deeper and deeper into debt, and in order not to go bankrupt they keep printing more and more. Even now that there is a small tightening, the debts do not stop growing.
In the end, the individual does not have a printer and ends up going bankrupt if he enters the circle you say. Or selling the few assets he has. A very typical case is that of someone who has a half-paid mortgage, but gets into a spiral of consumer debt and credit cards, and to get out of the hole what he does is to take a Home Equity Line of Credit.
I avoid debt like the plague, although I recognize that sometimes some debt is smart, and many companies do it but for most ordinary people it is usually a disaster.