Fast, easy cash loans, such as payday loans, are often an attractive option to those in need of money in a time crunch. However, some of these loans with a quick turnaround have interest rates at an average of 390 to 450 percent. With interest rates this high, many people in the St. Louis area will take out additional loans to pay off their high-interest payday loans, and these risky financial decisions may leave many people considering bankruptcy.

By offering lower interest debt repayment options, some churches, lawyers, bankers and other nonprofit organizations in Missouri want to provide additional choices to residents who are considering bankruptcy or seeking debt relief.

These groups and individuals, collectively called Fair Community Credit, are offering loans at an interest rate around 36 percent to individuals in need of alternative debt-repayment options. Although this entity only issued 500 loans in its first year of business, it's still a step in the right direction.

In addition to offering lower interest loans, the organization is also pushing a ballot initiative that would abolish the 390 percent or greater interest rates on payday-type loans, as well as cap the allowed interest rate at 36 percent.

For those individuals who are having difficulty paying their bills, experiencing high levels of debt and considering bankruptcy, Chapter 7 may be the best option. Chapter 7 bankruptcy allows complete forgiveness of debt, and the process for Chapter 7 could provide relief from crushing debt in just months.

Although many people may believe that Chapter 7 bankruptcy filings are no longer an option due to recent changes in legislation, this is not the case. While there have been updates to the criteria for filing Chapter 7, it still remains a potentially life-improving option for individuals who are currently experiencing financial hardship and turmoil.

Source: Kansas City Star, "Alternative arises as payday loan industry comes under scrutiny," Mike Hendricks, Jan. 22, 2012.