When a person has been forced into a corner financially for a multitude of reasons, they are tempted to go to a payday lender. If you are truly in a situation where you have an real emergency, then you may do this against your otherwise better judgement. But once you have done this, they have you in their clutches and have the goal of having you paying them for as long as possible. Their first goal is to put themselves into the best possible situation to make sure they get paid. They will require a check or at a minimum a bank account that allows them the right to sweep the account and auto debit the money out of the account that is required to pay your payday loan payment.
Often People Wonder, Should I File Bankruptcy on a Payday Loan?
The answer to this question comes after a careful consideration of the causes which got you into the financial mess in the first place. Hiring a McKinney bankruptcy attorney to help you with eliminating payday loans can be very effective, but you have to make sure that you have enough debt to make a bankruptcy the right choice. Discussing your situation in depth with an attorney who has experience with helping folks in McKinney file bankruptcy will be a wise way to approach the situation, but you will need to make sure that you can tell that the attorney has your best interests in mind. Some bankruptcy attorneys seem to recommend bankruptcy for all of the people who walk into their doors. This is simply not a good way to look at things because there are many times in which prospective clients come into our office set on filing bankruptcy only to find out that the attorney at our law firm recommends they choose a non-bankruptcy alternative that involves a better solution for them. As much as we would like to take your money, we want to make sure that we are doing the right thing for you before we ever take a penny.
The premise behind a payday loan that makes them such high targets for bankruptcy discharge comes from the way that the loans are set up for failure for the borrowers. Consider the thinking in getting a payday loan in the first place. There are a couple ways that this could go down. In one scenario the borrower could come to the lender with bright feelings of hope and optimism about their abilities to repay the payday loan. They could take out the loan completely understanding that they would be best served to repay the payday loan in full in order to make sure that the loan is done and over in quick fashion. However, the problem with a payday loan is that it is designed such that if you do not repay the entire balance of the payday loan then there are fees, which could include late fees, refinancing fees, processing fees and more which immediately kick into play if the loan is not satisfied within the period of time in which the first payment is due.
Optimistic Payday Loan Repayment Attitude
This scenario where the borrower has optimistic hopes thinking that they will be able to repay the loan quickly can quickly turn dark when they find out that the payday lenders will often stack fees, hidden interest charges and more into the loan in order to make it nearly impossible to repay the loan on time by the due date of the first payment. Then, once the borrower has missed their first available opportunity to pay the entire loan balance, they are swung right back into the same situation they were in to begin with. They were thinking they would be able to pay off the loan quickly and then when they miss their window of opportunity, fees, interest, and all sorts of things kick into play which make it so that you might have to pay back half of the loan amount just to keep it supposedly current. This process continues in a vicious cycle if the loan is not completely ended. The lender will almost seem like they are bipolar in their treatment of the borrower.
Haphazard Payday Loan Repayment Mindset
Another scenario in which a borrower my borrow money from a payday loan company would be under the pretense that they will borrow now and worry about repayment later. But unfortunately later comes quickly when it comes to payday loans. As opposed to loans like credit cards in which there is generally a grace period in which to repay and then the payments can come in installments monthly, a payday loan on the other hand will be required to be paid in full upon the next payday in many cases. If the loan is a single day late or if the loan is refinanced on the first payment then the balance grows again and sometimes even grows in a way that is higher than the original amount.
Maybe you took a loan from one of the following payday lenders:
- Online Payday Loans
- Ace Cash Express
- Speedy Cash
- Regional Finance
- Cash Store
If you did, then you should consider your options for obtaining a fresh start through bankruptcy. But how do you know whether your situation warrants a bankruptcy? The answer comes in the overall picture of your debts. Consider how much you owe to which types of lenders. If your total debt were $20,000 but $18,000 of that was a vehicle that you intend to keep, then a bankruptcy would likely not make a lot of sense. On the other hand, if you owe a total of $20,000 but the majority of that is old payday loans, credit cards, unpaid utilities, broken leases, repossessions or other types of unsecured debts like that, then a bankruptcy could be just the ticket to allow you a fresh start and to get out of the difficulties you’re facing. It won’t solve all of your problems because if you have found yourself obtaining payday loans then it hints to a fact that you may be having an income problem. An income problem means that you are not bringing enough money into the household to pay your bills. You will have a couple options after to consider in order to put yourself into a situation where you can avoid payday loans in the future.
Keeping Yourself Out of the Payday Loan Cycle in the Future
The best way to avoid payday loans is to put yourself into a good financial situation in which you will no longer need the loans. For example, if you are able to lower your expenses and free up some disposable income, then you can start saving money to be prepared to handle emergencies. Additionally, you could consider your options in getting more income coming into the household. Some folks will consider taking a second job, like a weekend job, an evening job or a job doing something like driving an Uber car around in order to supplement your income.
Remember, Get Good Legal Advice to Avoid Being Arrested for a Payday Loan Default
That all being said, it is important for you to keep in mind that while it is extremely rare for a person to be jailed for not paying a payday loan, there are still instances in which lenders are aggressively pursuing the most egregious of payday loan default offenders. Sometimes this ends up being an instance where the lender is trying to make an example of someone in order to get news stories like this article published about payday loan arrests in Texas.