If you do not have enough money to cover your bills between paychecks, payday loans may seem rather intriguing. Who would not want quick cash right when it is most needed? At the end of the day, however, Illinois residents who choose payday loans may find themselves worse off in the long run. For some, a Chapter 7 filing really may be the better way to go.
What is a payday loan? It is a cash advance on your upcoming paycheck. This is a loan that can be obtained either online or in a brick-and-mortar institution. All one has to do is write a check for the loan amount and any added fees and interest, if approved, the lender will give you the money and then they will cash your check on your next payday. Easy, right?
So, what is the problem? If you do not have the money you need now to cover your expenses, you likely won’t have the funds when payday rolls around, leaving you in the same situation only now you owe more. This creates a cycle of borrowing and extending payday loans which is just want these lenders want.
Illinois residents who are really struggling financially, who make less than the state’s median income or simply do not have enough disposable income may be better off pursing a Chapter 7 bankruptcy filing than dealing with payday loans. If you do so and it is approved, some, if not all, of your debts may be discharged. This can grant you a real fresh start rather than a band aid solution.