In recent years, many Americans have been buried under a mountain of debt. Most people want to avoid filing for bankruptcy at all costs, so they make minimum payments and leave it to the wayside. At some point, it is inevitable that filing for bankruptcy is just around the corner. Why do people wait so long to file a lawsuit, when deep down they know there is no other way out? But now there is an alternative to the immediate bankruptcy of the United States government. These are the same people who brought us Affordable Healthcare, the IRS, the United States Postal Service, massive debt, and impossible-to-exit deficits. Last week, it was announced that the federal government will use the Post Office for payday loans. Now, you don’t have to go to one of the local predatory loan offices, just go to the local post office and sign your life. If you ask me, it’s complete madness. Everything the government touches ends up benefiting the undeserving few and costing Main St., America dearly. The group behind the idea believes that the financially strapped post office will be able to bail out by going into the loan shark business.

In American culture, planning has become a huge part of our lives. You see financial planners on TV talking about preparing for the future with a 401(k) or an IRA. There’s nothing wrong with planning, but when in debt, the only financial planning a person should consider is filing for bankruptcy, not getting payday loans to get ahead. Now that the government is planning to make it easier for people to get into more debt instead of getting out of it, it can throw all financial planning to the wind. Most Americans are optimists and are always looking for short-term solutions rather than the ones that cause them pain and their spending habits. That is another reason for the popularity of payday loans, as they provide an immediate solution and allow the person to move on for another week. The sad thing is that these 300% loans end up taking the person’s entire paycheck just to pay the interest at some point. At that point, this person is almost too broke to file for bankruptcy. The good news is that payday loans are dischargeable in bankruptcy, so the borrower can walk away from them if necessary. At least this is from now on. I wouldn’t be surprised to see the government change the regulations on payday loans to something similar to student loans where it’s almost impossible to discharge them in bankruptcy.

When someone is overwhelmed by unsustainable debt, instead of using a financial consultant to see what can be done, they should talk to a bankruptcy attorney about other debt solutions. Filing Chapter 7 bankruptcy will eliminate all unsecured debt, including payday loans, leaving many people virtually debt free. This is quite powerful financial planning considering that the result only takes 4-6 months. There is no other program in the world that offers this kind of results. These results come at a price, as most people know that it will severely affect your credit. If you consider the alternatives and already know that a person filing for bankruptcy probably doesn’t have very good credit anyway, you start to look a lot better. Before making any kind of decision about what to do, you need to add up all your bills and calculate how long it would take to pay them if they stopped charging today. If it takes more than five years, the person should seriously consider the possibility that a bankruptcy filing is just around the corner.