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Looking for debt relief options? Steer clear of payday loans

Are you one of the numerous Wisconsin residents struggling to make ends-meet? Like many people, you might live paycheck-to-paycheck. Sometimes the money runs out before another paycheck arrives in your bank account. Many people in this situation turn to payday loans as the answer. Have you fallen into this trap?

What exactly is a payday loan?

A payday loan provides you with the option of receiving cash now in anticipation of your next paycheck. You obtain such loans in one of many brick-and-mortar locations or online. The company offers you a small loan amount and you typically receive funds instantly. Once the third-party lender approves your application, the company then requires you to write a post-dated check for the loan amount, along with fees. When your next payday rolls around, the lender simply cashes the check, which pays off your loan.

Sounds good, right? Wrong

Advertising for Payday loans gives you the impression that they provide you with a good way to deal with financial emergencies. Companies also prey on your need for a little help before your next payday. This sounds harmless enough.

These advertisements fail to tell you about the outrageous amount of interest on payday loans, which further increases your debt and sometimes makes it impossible to pay off the loan as intended. This creates a cycle of borrowing and owing, along with never ending fees, which only makes your financial situation worse. You should know that these companies label your interest as "fees" in order to get around federal laws that limit the amount of interest a lender can legally charge.

Are there better debt relief alternatives?

There are several alternatives to payday loans, including:

  • Living without
  • Applying for a conventional loan
  • Requesting a personal loan
  • Asking family for assistance

If the financial hole you find yourself in is simply too deep to get out of using one of these options, other legal options to deal with your debt that might suit your situation exist. These tend to include:

  • Bankruptcy
  • Going through debt settlement
  • Filing a Chapter 128 reorganization
  • Seeking debt modifications with creditors

An attorney can explain each of these options to you and help you decide which one would work best for you.

Get real help

If you need a small amount of money fast, it's understandable that you feel payday loans are the answer to your problem. However, you simply have to be careful about doing so. In most cases, taking out such a loan only worsens your financial position.

If you find yourself in over your head with payday loans, filing for bankruptcy could result in a discharge of these and other debts. If you want to avoid bankruptcy, other suitable options might help. An experienced attorney will review your case and assist you in taking the legal action that best benefits your economic situation.

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