Payday loans are one of the easiest ways to get money when you are in a financial jam. Since they are so easy to get, many people get in trouble with them once they borrow the money. If you find yourself in a situation in which you cannot easily repay your payday loans, it could lead to several issues in the future.
If you are not able to afford to pay back your payday loans in a timely manner, the company may try to collect the money from you. A collection agency may begin calling you or sending you correspondents in an attempt to get you to pay. While there’s nothing wrong with a collection agency doing its job, some agents take it too far. In fact, many companies engage in illegal debt collection practices.
In many cases, payday loan collectors will threaten to throw you in jail over the debt that you owe. They may curse at you or even threaten you with violence. In all of these cases, they are in violation of the Fair Debt Collection Practices Act.
Why Payday Loans Are So Costly
Even though payday loans are essentially a form of “easy money,” they are definitely costly. When you borrow money with a payday loan, you are going to end up paying a lot more for this type of loan than what you would normally pay. The APR for most payday loans is over 300 percent. Since it is such a short-term loan, most people don’t realize how much it costs comparatively. If you get in the habit of borrowing with payday loans, you’ll end up paying a lot more money in interest than you should pay.
Can They Be Discharged in Bankruptcy?
If you are having a very difficult time paying back your payday loans and you have a number of other debts, you may want to consider filing for bankruptcy. Since payday loans are an unsecured debt, they can be discharged in Chapter 7. If you file for Chapter 13, then you will simply enter your payday loans into a repayment plan administered by the court.
If you file for Chapter 7, this will completely wipe out the payday loan debt, and you will not have to repay it at any point in the future. While it will ding your credit for filing, it is often the fastest way to deal with your debt problems.
When you are considering filing for this form of protection, you may want to consider getting help from a Dallas bankruptcy attorney. Our bankruptcy attorneys will be able to consult with you and look at your case. Once we go over your options, you’ll be able to tell if filing for Chapter 7 is in your best interest. Our attorneys will then walk you through the process of filing and help you complete everything. Although it will require you to show up in court and help with some paperwork, it will give you a fresh start. Contact us here if you would need help recovering from payday loans.