Payday Loans

Our Attorneys Caution Consumers

Payday loan companies are notorious for preying upon hardworking individuals who find themselves in desperate need of quick cash for car repairs, rent, hospital bills, funeral costs or other time-sensitive payments. These loans are often small amounts with alarmingly high interest rates and only a short period to pay it back, usually not much longer than the date of your next paycheck. Our Kansas City bankruptcy attorneys caution that the interest charges and fees on payday loans can turn the original amount, which may be only a couple hundred dollars, into a loan amounting to thousands of dollars very quickly.

We understand how this can make the repayment of the loan nearly impossible, trapping individuals into a dangerous payday cycle they cannot end. Of particular danger is the practice of giving any such lender access to electronically withdrawing funds from a bank account. Once such a lender has that access, it is very difficult to stop withdrawals from being made — even if you file for bankruptcy!

According to the Consumer Federation of America, eighteen states in addition to the District of Columbia prohibit payday companies from lending extremely high-cost payday loans. However, in Kansas and Missouri, this practice remains.

Managing Member Neil Sader and the bankruptcy attorneys at Sader Law Firm, LLC feel that using payday loans can be very dangerous for a number of reasons, including:

• Interest rates on payday loans can range anywhere from 500% to percentages in the thousands. For example, Missouri state law caps the APR on a 14-day loan of $100 at 1,980% with a finance charge of $75.
• Payday companies set up an agreement with you to take a postdated personal check or a debit authorization to secure the payback of your loan. If you are unable to pay, you may have the option of renewing, extending or borrowing more money to cover the first loan amount. Each of these transactions may be subject to additional fees and high interest rates.
• If you are unable to repay the loan, a lender might try to deposit the personal check you left with the company to collect any funds in your bank account. This can cause the bank to charge you fees for insufficient funds in addition to you still owing the payday company the total loan amount.

Since 1997, the attorneys at Sader Law Firm have experience providing debt solutions for people throughout Kansas and Missouri. While payday loans are generally dischargeable in bankruptcy, it is often most important to move quickly to stop automatic payments from your bank account. If you are struggling with financial problems caused by one or more payday loans, reach out to our bankruptcy lawyers today to learn more about how filing for Chapter 13 bankruptcy or Chapter 7 bankruptcy can help eliminate your payday loan troubles.

During a free initial phone consultation, we can give you an honest assessment regarding how best to deal with your debt from payday loans — whether through bankruptcy or another financial solution. As a law firm that focuses on bankruptcy, we will not hand you off to an attorney who takes a bankruptcy case every now and then. Every day our attorneys work alongside clients, helping them eliminate their heavy debt burdens while giving the personalized attention their cases deserve.