As a bankruptcy attorney, I review my clients' lists of debts every day. More and more of my clients lately owe money to payday loans. A payday loan is a relatively small, high-cost loan, typically due in two weeks and made with a borrower's post-dated check or access to the borrower's bank account as collateral. Payday loan companies are often internet based. They often have no physical presence, no bank or office you can visit. Very often these payday loan companies are not even located within the U.S. These loans are often a loan of last resort. If someone is desperate to pay rent or a car payment and knows they will have the money on payday, but they need it now, a payday loan may seem like a good idea.
The problem is, the payday loan is so expensive, the interest rate is so high, that borrowers may end up paying back triple or more than they borrowed.
When Payday loans become delinquent, meaning a payment is missed, the collection tactics I have witnessed often violate the Fair Debt Collection Practices Act.
I have had many clients tell me that collection agents have threatened them with arrest and even pretended to be the police calling to collect the debt.
Some of these debt collectors have told my clients that the payday loan is not dischargeable in bankruptcy, meaning that they will still harass my client whether they file bankruptcy or not.
Here are the facts:
- You will not be arrested if you fail to pay back a payday loan.
- The police will not assist the payday loan company in collecting the debt.
- If you file bankruptcy, you can discharge payday loans and then you should never again receive a call or a letter or a lawsuit from the pay day loan company.
I have helped thousands of clients discharge their payday loans. Not one single client has ever been arrested for not paying a payday loan back.
Call or email me today to discuss eliminating your payday loans.