Over the past two years, many Americans have been buried under a mountain of debt. Most people want to avoid filing for bankruptcy at all costs in order to make minimum payments and get rid of the situation. At some point, it is inevitable that bankruptcy is imminent. Why do people wait so long to file their cases when they know deep down there is no other way out? But now there is an alternative to the immediate bankruptcy of the US government. These are the same people who brought us affordable health care, the IRS, the United States Postal Service, massive debt, and the deficit that is impossible to get out of. Last week it was announced that the federal government was going to use the Post Office for payday loans. Now you don't have to go to one of the local loan sharks' help desks, they just go to the local post office and sign your life. If you ask me, this is total madness. Everything the government touches ends up benefiting the undeserving few and is costly in Main St., America. The group behind the idea believes the financially struggling Post Office will be able to get out of the hock by going into the loan shark business.
In American culture, planning has become a big part of our lives. You see financial planners on TV talking about preparing for the future with a 401 (k) or IRA. There is nothing wrong with planning, but when you're in debt the only financial planning a person should consider is filing for bankruptcy, not getting payday loans. Now that the government plans to allow people to take on more debt instead of getting into debt, you can throw all the financial planning into the wind. Most Americans are optimistic and always seek short-term solutions rather than the ones that cause them pain and their spending habits. This is another reason for the popularity of payday loans as they provide immediate solution and allow the individual to get their hands on the road for an extra week. The sad thing is that these 300% loans end up taking an individual's entire paycheck just to pay the interest at one point. At that point, that person is almost too broke to even file for bankruptcy. The good news is that payday loans are dischargeable in bankruptcy so that the debtor can walk away if necessary. At least it's from now. I wouldn't be surprised to see the government change the payday loan regulations to something similar to student loans, where it is virtually impossible to release it in bankruptcy.
When a person is overwhelmed with unsustainable debt, instead of going to a financial consultant to see what could be done, they should talk to a bankruptcy lawyer about other debt solutions. Filing for bankruptcy under Chapter 7 will wipe out all unsecured debt, including payday loans, and leave many people virtually debt-free. This is quite a powerful financial planning when you consider that it only takes about 4-6 months to see the result. There is no other program in the world that offers this kind of results. These results come at a price, as most people know it will take a heavy toll. If you consider the alternatives and already know that a person bankruptcy filing Probably doesn't have very good credit anyway, he's starting to look a lot better. Before making any sort of decision on what to do, one needs to add up all of their bills and figure out how long it would take to pay them if they stop billing today. If it takes more than five years, the person should seriously consider the possibility that a bankruptcy filing is imminent.