When people in New Jersey find themselves swimming in too much credit card debt, they might feel like they have few options available to them. Unmanageable debt can easily get out of control; high interest rates, late fees and the ability to spend beyond one’s means make credit card debt a seemingly insurmountable obstacle.

To combat this, many people turn to payday loan companies. This is not an option in New Jersey; our state is one of about a dozen states that don’t allow payday loan companies to operate within their borders (neighboring New York and Pennsylvania also prohibit them).

However, the remaining states more than make up for this. In fact, according to a recent report, Americans are charged more than $3 billion per year in fees due to payday loans. These costs can add up quickly because of the outrageous interest rates people agree to when they take out such a short-term loan. However, many still opt to go this route; they figure that they will be able to pay back the money without triggering fees, or feel that they have no alternative but to seek a payday loan.

What might be a better long-term solution for at least some of these people is filing for personal bankruptcy. It might be that the only way to put an end to overwhelming credit card debt is to get a fresh start through bankruptcy. Everyone’s situation is different, however; an experienced New Jersey bankruptcy attorney can advise people who are considering taking this action.

Source: Collections & Credit Risk, “Payday Loans Cost Families $3.4B Yearly: Study,” Darren Waggoner, Oct. 30, 2013