Payday loan providers market their services as a means of acquiring emergency funding, which can be used for anything from vacations to unexpected car repairs. Due to the unique structure of payday loans, borrowers commonly find themselves locked into a cycle of debt, with exorbitant fees placing an increasingly heavy burden on those who are already struggling with debt. Fortunately, as Backus Law Group in Montgomery, AL, explains, filing bankruptcy can often provide an avenue of relief for borrowers caught in this cycle.
Payday loans are unsecured loans where the lender provides a sum in cash in exchange for a post-dated check or bank account information. If the borrower does not pay back the loan by a specified date, the payday lender will cash the check, which often takes a portion of the borrower’s next paycheck along with interest rates sometimes exceeding 100%.
After paying back the loan, many borrowers who live paycheck-to-paycheck find themselves unable to make ends meet, forcing them to resort to payday lenders, who are sometimes the only loan source available. While some states limit how many times an individual can take out a payday loan, this provision does not solve the financial problem.
As unsecured debts, payday loans are subject to discharge for people filing bankruptcy, although the lender may choose to object, arguing that you never intended to pay back the debt. However, with a skilled bankruptcy attorney representing your interests, the payday lenders are unlikely to succeed in court, allowing you to get your financial life back on track.
The professionals at the Backus Law Group have extensive experience helping people in almost any financial situation get the second chance they deserve. Visit their website to learn more about their dedication to their clients and list of legal services, or call (334) 265-0800 to speak with one of their attorneys about filing bankruptcy today.