Can Signature Loans and Payday Loans Be Discharged?
Signature loans and payday loans are unsecured debts that can be eliminated in bankruptcy. Creditors do not design these high-interest loans to be paid off. Predatory lenders often use payday loans to entice good people who feel they have no other choice. The burden of these high-interest payday loans can lead to insolvency in Springfield Missouri and is often the reason for filing bankruptcy.
Payday Loans Statistics in Missouri
In the State of Missouri, payday lenders can charge an enormously high-interest rate. Missouri has some of the weakest consumer protection laws to regulate this predatorial industry from taking advantage of Missourians. Missouri has more payday lenders than they have McDonald’s, Starbucks, and Wal-Mart stores combined.
In 2018, 1.62 million payday loans were issued in Missouri alone, averaging 1 in 4 residents. Loans carried an average APR of 462.78 percent, and the fees and fines add up to tens of millions of dollars. This is detrimental not only for Missouri families but it’s terrible for our state’s economy. Eliminating your burden from these types of loans is key to your financial future.
How Creditors Keep You in Debt With Payday Loans
Once an individual starts the cycle of receiving a payday loan or signature loan it becomes very difficult to pay off the debt. Due to the high-interest rates and practice of renewing the loans, these creditors attempt to keep you in debt.
In most cases, clients have paid the lenders far more than the initial loan balance but still owe a substantial amount. Additionally, these predatorial lenders are very aggressive in the collection and cause financial and emotional stress for borrowers.
How Does Bankruptcy Help When I Have a Payday Loan?
In some circumstances, the lenders require the borrower to list a personal property as collateral for the loan. A common example would be TVs, electronics, or other household goods. The lender usually lists a very high value for the property in order to offer a high loan amount.
Consulting with a bankruptcy lawyer may allow you to keep your personal property, such as household goods, without having to repay the debt. Generally, bankruptcies discharge debt that is owed to lenders, but it does not remove liens from property.
This means that in order to keep the collateral you have pledged for a loan, you must continue to pay the debt. However, an experienced bankruptcy attorney can prepare an additional document, called a motion, to remove the lien from your personal property. This allows you to both eliminate the debt and keep your collateral. Therefore, you need to consult with an experienced Springfield, Missouri bankruptcy attorney for these types of loans especially if they have collateral.
Our experienced bankruptcy attorneys are knowledgeable in handling these creditors and we offer a free consultation for legal advice to see if bankruptcy is a good option for eliminating these debts. A free consult at the Licata Bankruptcy Firm will allow you to determine if filing bankruptcy is your best option to rid the stress of payday or signature loans.
If you have a signature or payday loan, reach out to the experienced bankruptcy lawyers at Licata Bankruptcy Firm. Set up a free initial consultation by calling (417) 213-5006 or completing an online form.