WARNING! Companies that issue payday loans rely on people who have become desperate for money to be able to pay unexpected expenses such as vehicle repairs, rent, or other expenses. These companies typically offer small loans that come with extremely high interest rates. These loans as well as all associated fees are expected to be paid back in full upon the receipt of the following paycheck. A small payday loan of a few hundred dollars can quickly become a loan that exceeds a thousand dollars because of the high interest rates and fees. This is why it is advised that individuals use extreme caution when relying on payday loans.
Repaying a payday loan can become almost impossible. Payday loans can be dangerous because many of these lenders require an authorization that grants them access to electronically withdraw money from the borrower’s bank account. These authorizations can be difficult to revoke.
If you find yourself struggling to pay your debts, a bankruptcy attorney can explain options that are better than continuing the debt cycle that payday loans create with their high fees and interest.
While eighteen states have prohibited the lending of payday loans with high interest rates, Missouri and Kansas still allow these loans.
There are many reasons why payday loans are extremely dangerous:
· Payday loans can carry an interest rate ranging from 500% upwards to over 1,000%. In Missouri a payday lender can charge a $75 financing fee on a $100 loan over a 14 day period, which is a percentage rate cap of 1,980%.
· These payday loan companies agree to accept either a check post-dated to your next payday or an authorization granting them access to electronically withdraw the funds from your bank account on your next payday. These loans have options which allow you to renew, extend or even borrow additional money at the time the loan is due to be paid back. Unless the loan is simply paid in full at the end of the term, there will be additional fees and more interest charges associated with each transaction.
· If at any time you cannot pay back the payday loan, the company may try to withdraw the funds from your account by either depositing the check you provided or electronically withdrawing it from your account. If the funds are not in your bank account, the bank will charge additional fees and you will still owe for the payday loan.
A Chapter 7 or Chapter 13 bankruptcy can assist you with eliminating financial dilemmas you may be experiencing due to payday loans.
Can Payday loans Be Discharged in Bankruptcy?
Our lawyers can help you end the devastating effects that payday loans can have on you and your finances, whether through Chapter 7 bankruptcy or Chapter 13 bankruptcy.
We offer a free consultation that will allow us the opportunity to assess your financial situation and determine the best solution for you. We provide personalized attention to each case while assisting our clients in eliminating their debt through bankruptcy.
Are You Considering Filing For Bankruptcy?
If you feel bankruptcy is the best option for your financial situation you need to speak with an experienced bankruptcy lawyer as soon as possible. Please contact us online or call our office directly at 888.348.2616 to schedule your free consultation.