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Chapter 7 bankruptcy often better choice than short-term loan

Financial problems are not just the concern of those seeking employment. All too often, Kentucky residents with full-time employment face moments when it seems impossible to make ends meet. Day in and day out, these individuals spend hours trying to earn enough to pay the bills, but it just never seems to be enough. When this is the case, it may be in the individual's best interest to file for Chapter 7 bankruptcy.

Over the years, various forms of lenders have made loans available to those who are struggling. These borrowers are looking for a way to get past today's crisis and make it to the next payday. Unfortunately, many borrowers discover that these types of loans only lead to more debt and increased financial problems.

In an effort to protect the general public, the Consumer Financial Protection Bureau has placed new rules on lenders who issue what some refer to as payday loans. Rules now in place require these lenders to verify that the borrower has the ability to repay the loan within the designated time period. In the past, the majority of these lenders' profits have been made when borrowers have been unable to meet their obligations. However, this new rule changes all of this and will most likely have a dramatic impact on this industry.

The typical Kentucky resident who seeks a payday loan is often facing serious financial problems. These problems often cannot be solved with a short-term loan. Instead, this individual may be best served by seeking a more permanent solution such as Chapter 7 bankruptcy. An experienced bankruptcy attorney can review the individual's situation and offer guidance as to the best way to proceed.

Source: finance.yahoo.com, "Consumer watchdog is killing 'payday loans' -- here's what will take their place", Ethan Wolff-Mann, Oct. 7, 2017

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