How to Escape the Payday Loan Cycle

Wednesday, November 21, 2018 - 00:44

Money Management

I've said it before and I'll say it again, payday loans are a vicious cycle. If you're struggling to make ends meet, the worst thing you can do is take out a payday loan. The payday loan cycle is a simple concept. You borrow from one payday lender for an emergency and suddenly find yourself at another payday lender trying to pay out your first payday lender; and suddenly, after fees, interest, and other charges, you owe several payday lenders and are trapped. Many people go to a payday loan center for a quick bit of cash because they can't make ends meet. But in the end, they usually end up going further and further into debt.

Payday loan debt can get so bad that the only hope for someone is bankruptcy, but other options could be available. Maybe all you need is a little bit of credit and debt counseling to learn the tools you need to get back on financial track. Maybe you just need a new, more realistic budget.

If, despite all of your best efforts, you still can't get out of your payday loan problems, then you may want to consider filing bankruptcy or making a consumer proposal. Consumer proposals and bankruptcy are long-term fixes and won’t just give you “air to breathe” for a short period of time, but they will allow you to get back on your feet and leave your debt behind.

If you're struggling, consider contacting our office and setting up a free, no-obligation consultation with one of our Licensed Insolvency Trustees.