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You can resolve your payday loan debt in bankruptcy.
Despite threats to the contrary, cash advances and payday loans may be dischargeable in bankruptcy.
Payday loans are short-term, unsecured cash advances. A borrower typically writes the payday lender a postdated check for a loan amount of several hundred dollars plus a fee; that check then gets cashed when the borrower receives his or her next paycheck. The annual percentage rate (“APR”) on a payday loan can vary from 100% - 1000% of the amount borrowed.
State governments, consumer groups and others have criticized the size of the payday fees, which can translate into eye-popping annualized interest rates. Another oft-heard criticism of payday lenders is that they encourage borrowers, primarily in the low-income bracket, to take out multiple loans, which results in ever larger fees.
This vicious cycle of payday loan borrowing often causes considerable stress and leads individuals to consider debt solutions (including bankruptcy) to solve their payday loan problems. In the state of Washington, payday lenders may lend a maximum of $700 per payday loan. However, when a payday loan is taken every pay period, the interest and principal to be repaid by the borrower can lead to financial disaster.
If you are drowning in payday loan debt, and are constantly harassed by the aggressive collectors hired by the payday lender, you have several options. Even though your payday loan agreement states you did not intend to file bankruptcy at the time you incurred the payday loan, a subsequent call to Attorney Bankruptcy Services usually is not a violation of this provision.
Whether it’s bankruptcy or debt settlement, Attorney Bankruptcy Services can advise you on your best course of action when it comes to payday loans.
To receive a free consultation regarding your (or your friend or family member’s) debt problems, please contact us today.
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