Payday Loan Freedom

Do you ever feel like you’re the only one swimming in debt? According to recent studies, approximately one in three Americans has month-to-month debt. When a consumer has at least one credit card, they may reach an estimated $15,000 in such debt. During tough financial times, most consumers don’t know where to turn for help. When options are daunting, payday lending is an easy opportunity for a person to get fast money. However, consumers should think first about these lending methods. Payday lending includes installment loans, cash advances on paychecks and car title loans.

Ohio’s Short-Term Loan Act (STLA) limits the loan amount, interest rate and fees applied towards the repayment plan. Currently the law states that the amount of short-term loans must be less than $500 with a 28% APR for each loan. In addition the loan cannot be less than 31 days and repayment must be extended to at least 60 days with no additional charges. However, most consumers take out numerous loans and most lenders do not follow the legal procedure. As a result consumers fall into a vicious cycle of using the last loan to take out a new loan.

Luckily, the federal government may speak up for the low-income consumer who is overwhelmed by payday loans. In March, the Consumer Financial Protection Bureau and President Obama spoke on the matter. The federal law would require the lenders to check that borrowers are able to pay back the loan. However, the government would allow these high interest loans to remain since they provide consumers with a credit option that is sometimes essential.

According to the White House, 80% of payday loans are rolled over into the next month and the average borrower is in debt for 200 days. However, Chapter 7 bankruptcy is an option to discharge certain payday loans. Payday loans may be discharged if each loan was incurred prior to the last 70 days and are under $750.

If this sounds like you, give our office a call and we can answer your questions. We want to help you prevent further financial problems and help you get your credit back in order.

Check our experienced Bankruptcy attorney Ohio for further help needed at the Law Firm of Barr, Jones & Associates LLP