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As bankruptcy attorneys that both live and work in Colorado, we’ve noticed an alarming trend of new bankruptcy clients seeking debt relief from payday loans.
And it’s not just the monetary debt that these clients are seeking relief from, it’s the threatening tactics that these payday loan companies use in the harassing phone calls, letters, and e-mails they spam debtors with.
Our Colorado Springs bankruptcy attorneys are saddened to report that we’ve had clients tell us that collection agents have threatened them with arrest and even pretended to be the police calling to collect the debt.
Another bald-faced lie these predatory lenders have told my clients is that payday loans are not dischargeable in bankruptcy, meaning that they will still harass my client whether they file bankruptcy or not.
Since these payday loan debt collectors have become such a nuisance to so many of our El Paso County bankruptcy clients, we want to go ahead and give you some valuable information for your peace of mind.
If you are tired of being trapped in the payday loan cycle, our Colorado Springs debt relief lawyers are here to help. Our team of qualified legal professionals has over 30 combined years of experience helping El Paso county residents get a financial fresh start through bankruptcy. If you are struggling financially, contact us for a free evaluation of your financial situation so we can figure out, together, how we can help you. Let our firm help you and your family get off the payday loan cycle and onto the road to financial recovery.
Payday loans– you may have also heard them referred to as cash advances, payday advances, paycheck advances, short-term loans, or fast cash loans. Whatever you call them, payday loans are perhaps one of the most difficult types of debt to get out of.
Payday loans are small, short-term, high-interest loans that typically come due on your next payday. Their mechanics are quite simple and start with the lender having the borrower sign a contract (common for all types of lending, not just payday loans) stipulating that the borrower will pay back the loan amount, plus interest to the lender with funds from the borrower’s next paycheck. The lender will then give the borrower cash for the agreed-upon loan amount. Payday loan companies actually advertise how simple the process is, and that you can be in and out with cash in hand in under 30 minutes.
If that sounds too good to be true, that’s because it is. Many Colorado Springs residents find themselves making payment after payment on their payday loan, only to discover that they still owe the same amount they started with. This is because the interest rates on payday loans are insane. This means that each payment you make is only covering the interest.
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 that these businesses can charge customers, at the end of the day, the legal interest rate allowed is still unreasonably high and forces many El Paso county residents into a never-ending cycle of payday borrowing just to stay afloat. This insidious cycle can replay itself over and over again and can result in truly exorbitant fees being paid over the term of the loan.
Don’t make the mistake of taking out new payday loans to pay off old payday loans. That’s a cycle that most people can never get out of. Instead, make an appointment with an experienced Colorado Springs bankruptcy attorney. Let us help get you out from under payday loans.
Payday loan businesses, credit card companies, and other lenders will continue warning people against personal bankruptcy. Our Colorado Springs bankruptcy attorneys have designed this page to combat those false claims. Those who learn the truth about the benefits of using bankruptcy to eliminate debt often find that it is the only real, practical solution for them.
Bankruptcy exists because the United States government deemed it a societal good to give our fellow citizens with overwhelming debt a second chance at financial freedom. For personal debt relief in Colorado Springs, petitioners can file either Chapter 7 or Chapter 13 bankruptcy.
In Chapter 7 Bankruptcy, also known as liquidation bankruptcy, filers hope to earn a discharge of most or all of their unsecured debt by the end of the process. Discharge means the debt is forgiven and doesn’t get repaid. Unlike secured debt, unsecured debt includes anything not backed by property or collateral, including small personal loans like payday loans.
In a Chapter 13 bankruptcy, also known as a “wage-earners bankruptcy” the court requires 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.
You should know that whether you file for Chapter 7 or Chapter 13 bankruptcy in Colorado, filing a bankruptcy case triggers the automatic stay, a mechanism created by federal bankruptcy law that acts as a bar to a creditor collecting a debt. So if you’ve been harassed and threatened by payday lenders seeking debt repayment, those calls, letters, and e-mails must immediately cease as soon as you file bankruptcy in Colorado Springs.
Driving through Colorado Springs you’ve no doubt seen those “instant cash now” places. When you don’t have enough money to pay all of your bills each month, it can be tempting to use payday loans to bridge the gap. But payday loans are expensive, and many people find themselves taking out additional loans the following month, in a vicious cycle that only benefits payday loan companies. If you’re regularly relying on payday loans, filing for bankruptcy can help you wipe out the debt and break the cycle.
The CO payday loan lawyers working at our law firm have little patience for predatory lenders. If you’ve been victimized by an unscrupulous lender, we will aggressively fight to ensure you get immediate relief from their diabolical tactics. You will be shocked by how much stress is relieved by simply putting a stop to their harassment.
You will also be amazed by how quickly your credit score improves after finalizing your bankruptcy. A fresh financial future awaits, and it all starts with a free consultation from one of our CO bankruptcy lawyers.
Bankruptcy has helped many Colorado Springs residents find relief from expensive payday loans, and get a fresh financial start. With an experienced El Paso county bankruptcy lawyer at your side, you will have a fierce advocate fighting for your debt-free future. If payday loans and bills are overwhelming you, contact us today to speak with an experienced debt relief attorney for a free case consultation.