Yea it’s definitely possible to end up in a bad contract if your not careful. But the advance is a royalties advance, so it’s not a loan. You can’t default on it you just don’t see any additional royalties until it’s paid off. Your under no obligation to ever pay out of pocket to repay an advance for a recording contract. If your album doesn’t sell your financially better off for having received an advance. That said again it’s possible to get stuck with a bad contract, one you shouldn’t have signed. This article does a good job of explaining the ins and outs of a record deal. https://www.soundonsound.com/music-business/recording-contracts-explained