Chances are if you’ve watched television or driven around town recently, you’ve seen advertisements for payday loans. They use bright colors and catchy slogans like “Need cash now?” to draw in customers across Colorado, from Mesa County to Yuma County, and everywhere in between.
For households struggling to make ends meet, payday advances may be a necessity to pay their bills and support their families. The flashy signs and promises of “Cash now!” lure in hundreds of people daily looking for a quick and easy fix to their financial woes.
In most cases, it’s best to avoid payday loans at all costs.
Of course, if you’re reading this, that ship has probably already sailed.
The most important advice we can give you right now is to not beat yourself up. You are not alone. Thousands of Colorado residents have fallen into the vicious debt cycle that payday loans can lead to.
People going through a financial storm may think payday lenders can offer a life raft. This is seldom the case, and taking out a check-cashing loan usually only makes things worse. To understand more about payday loans and predatory lending in Colorado, continue reading this website, and then contact one of our experienced Colorado bankruptcy attorneys to discuss your debt relief options.
Predatory lending is a term used to describe a wide range of unfair financial practices. Payday loans are usually defined as short-term, high-interest unsecured personal loans that are meant to be paid back in a single lump sum via your next paycheck. Commonly referred to as payday loans, other names you may have seen include cash advance loans, paycheck loans, short-term loans, payroll loans, payday advance, and fast-cash loans.
Easy to get, and very difficult to pay off, these loans spell trouble for almost everyone. Payday loans tend to have a simple application process and very few requirements. They will typically look to see that you have an active account with a bank or credit union and a job or other verifiable source of income.
You provide your identification, banking, and other details. Once you’re approved, you usually receive your loan funds within 24 hours.
In Colorado, charging excessive interest rates or predatory loan practices is prohibited as criminal usury, thanks to Colorado’s Proposition 111, which was passed in 2018. Proposition 111, also known as the Limits on Payday Loan Charges Initiative, was designed to reduce the interest rate on short-term loans to a yearly rate of 36 percent and eliminated all other finance charges and fees associated with payday lending.
However, it’s important to note that even though predatory lending is regulated by state and federal laws to cap the interest rate these businesses can charge customers, at the end of the day, the legal interest rate allowed is still unreasonably high and forces many Colorado residents into a never ending cycle of payday borrowing just to stay afloat.
Payday loan companies exist to set customers like you to become reliant on them, because the loans are due quickly, and the fees can continue adding up. These requirements often make it difficult for a borrower to pay off a loan and meet regular monthly expenses. Additionally, many payday loan users have loans from several different businesses, worsening their financial situation.
If you or someone you love is caught in a payday loan debt cycle and needs help figuring a way out, bankruptcy may be an option. For a no-cost case consultation, please contact our knowledgeable CO bankruptcy attorneys.
Usually, people get payday loans in a last-ditch, desperate attempt to avoid bankruptcy.
Thanks to the negative stigma surrounding bankruptcy, many people go to desperate lengths to avoid having to file. Bankruptcy can be perceived as a failing or shameful. And while bankruptcy isn’t right for everyone, the truth is that the Federal Bankruptcy Code exists to give debtors a fresh financial start.
People go into debt and ultimately file for bankruptcy for many reasons including:
They file bankruptcy as a last resort, after they have cashed in retirement plans, borrowed money from friends and relatives, sold non-essential goods to pay the bills, maxed out credit cards, and possibly taken out payday loans to cover their mounting debt.
If you can relate to any of the above, bankruptcy may be the right choice for you. Bankruptcy exists because we deem it a societal good to give our fellow citizens a second chance. For personal debt relief in Colorado, petitioners have the ability to file either Chapter 7 or Chapter 13 bankruptcy.
In a Chapter 13 bankruptcy, the court will require the borrower to repay debt using a court-structured repayment plan. This repayment plan generally lasts anywhere from 3 to 5 years. Payday loans will be treated as any other unsecured debt and may be included in the repayment plan, allowing the debtor to repay creditors over a period of time from future income.
If you’re interested in learning more about Chapter 7 or Chapter 13 bankruptcy and which option may be right for you, you can find more in-depth information on this website or contact our Colorado bankruptcy lawyers for a free case evaluation.
If you choose to work with one of our Colorado bankruptcy attorneys to file your bankruptcy case and halt creditor action, you can trust our team of experienced legal professionals to fight predatory lenders.
When you contact our CO debt relief attorneys for your free consultation we will provide a thorough review of your case and explain the legal options available to you. If you were the victim of predatory payday lending we can take legal action to defend your rights and seek justice for the harm caused by the illegal lending practices.
Our experienced bankruptcy attorneys are dedicated to helping our clients achieve financial freedom through bankruptcy. We carefully scrutinize all aspects of your case and help you determine which debt relief option is the best for your unique circumstances. Additionally, our team will be there with you every step of the way, making sure you understand exactly what’s happening during each stage of your case.
We’ve helped countless clients all over Colorado, including:
Don’t hesitate to reach out today for a no-cost case evaluation.
