Payday Loans: Playing with Fire

Quick Fix or Burdensome Debt?– Financial Quick Sand of Payday Loans 

Payday loans provide a quick cash resource for many people, but more often than not, this quick fix can turn into overwhelming debt very quickly, burying a borrower in debt with massive interest rates attached.  These loans are usually seen as a short-term solution for bills or other financial obligations.  The loans are advanced to the borrower who promises to pay it back on their next pay day.  The loans do not require collateral or a credit check and are advanced solely because the borrower has a job and steady income.  Typically, borrowers write a postdated check for the agreed upon amount plus a finance fee.  The finance fee is where borrowers can experience sticker shock; it is not uncommon for the annual percentage rate forto be hundreds of percentage points.

Payday loans are a great source for quick emergency cash if the borrower is able to pay back the original loan plus the finance fee.  But if a borrower can’t pay back their original loan, many times they take out a second payday loan to cover the first.  This can lead to a vicious cycle of borrowing at extremely high interest rates to pay off what began as a relatively small debt.

In addition, many businesses that offer payday loans also provide loans for car titles, or operate a pawn shop.  So, a debtor who first uses a payday loan, but then is unable to pay it back, may have to take out a car title loan, or pawn something of value.  Do not fall for this scheme, there are other options available, like bankruptcy.  Relief is available!  Payday loans are dischargeable in bankruptcy, with some limitations.

Have you fallen into this repetitive cycle? Bankruptcy can provide the relief you need to eliminate this debt, while keeping your assets in place.  Contact me, the Ohio Bankruptcy Attorney, David Smith at (937)-318-1529 today for a free in-office or telephone consultation.  I’ll help you gain your fresh start for a new tomorrow!