Just when we thought we had heard it all, the payday loan industry has a brand new trick up its sleeve. With the unemployment rate over 9 percent and millions of Americans on extended unemployment, many companies in the payday loan industry are now accepting unemployment checks as proof of income. That’s right, unemployed Americans who are already struggling financially are now able to take out the high interest, short term payday loans which create nothing but a spiral of indebtedness that leaves many seeking bankruptcy protection.
If this isn’t an example of predatory lending I don’t know what is. Unemployment checks are miniscule and temporary and never intended to be used as collateral for a payday loan or any other loan for that matter. What’s next? Will we soon see credit card companies accepting unemployment insurance benefits as proof of income? It seems that the debt industry will stop at nothing to make profits off of the desperation of others. This is why it is so important that debtors who experience a job loss quickly assess their financial situation. It is unrealistic to believe that an unemployed debtor can live the same way they did when they were employed, it is just not possible. Unemployed debtors must move quickly and aggressively to reduce their debts and expenses because if they don’t they may eventually feel desperate enough to take out a payday loan when an emergency strikes-and it will strike eventually. If you are a debtor who is experiencing long-term unemployment, please consider your bankruptcy options. Bankruptcy will allow you to discharge your debts and avoid the downward cycle of taking out payday loans and other predatory loans just to survive.