Payday Loans & Bankruptcy in Springfield, MO
For many, taking payday loans isn’t a matter of choice. Instead, most people take them to help make car payments, buy groceries, pay a phone bill, and more. When they take a payday loan, many people face the problem often associated with this kind of loan, high-interest rates. As a result, what can seem like a simple, necessary loan to keep you on track financially can get out of hand quickly. This can lead you down a path where you pay back significantly more money than you were loaned in the first place. For some, this can force them to seriously evaluate bankruptcy as one of the only options to escaping these predatory loans.
Schedule a Free Consultation
At Reynolds and Gold, we have years of experience helping people throughout Springfield and Southwest Missouri decide whether filing for bankruptcy is the right option as they face significant amounts of payday loan debt. Contact us today to schedule your free consultation. During this initial consultation, our bankruptcy attorneys will discuss your specific situation, payday loans and all, to determine whether filing for bankruptcy makes sense for you.
How common are payday loans in Missouri?
You may be feeling like you’re alone or that you’re a failure as you struggle to pay off payday loan debt. We want to make sure you know that both things are not true.
Payday loans are widely considered to be predatory lending. Companies who provide these loans prey on people who are in a tough spot and need help. In fact, most people who take out payday loans do so for some recurring or unexpected expense like rent, car payments, and other essential costs.
Additionally, as of 2019, there are 23,000 payday lenders in the United States who lend to thousands of Americans each year. In Missouri, it’s even worse. We have some of the weakest consumer protections surrounding payday lending and higher, on average, interest rates than many other states. In 2016, 1.62 million payday loans were issued to Missouri residents from licensed payday lenders. Additionally, Missourians, on average, pay an interest rate of 462% on payday loans, according to the Community Voice. All this to say, you’re not alone, and the bankruptcy attorneys at Reynolds and Gold Law are here to help.
Can payday loans be discharged after filing for bankruptcy?
At this point, you might be wondering whether you can discharge or get rid of your payday loans after you file for bankruptcy. The answer is, “it depends.” Depending on what type of bankruptcy you decide to file, you may or may not be able to discharge payday loans.
Chapter 7 bankruptcy
If you decide to file for chapter 7 bankruptcy, you’re essentially allowed to discharge all unsecured debt, including short-term, high-interest payday loans. Because this debt is considered “unsecured,” it isn’t deemed high-priority that you pay it back. That being said, payday loan debt must be declared on your bankruptcy petition. To learn more about Chapter 7 bankruptcy, visit this page.
Chapter 13 bankruptcy
Chapter 13 bankruptcy, unlike Chapter 7 bankruptcy, requires you to repay a portion of your unsecured debts over time as a part of a structured, agreed-upon repayment plan. As a result, if you decide to file for Chapter 13 bankruptcy, unsecured payday loan debt will be included in your repayment plan, which means that you will be required to pay some of it back over time. To learn more about Chapter 13 bankruptcy, visit this page.