Woman Borrows $200 From Payday Loan. Guess What Happened Next?

paydayloansI’ve heard so many stories about people who take out payday and title loans, and how the interest is worst than borrowing from a loan shark.

Some years ago, I was called upon to do some research by an attorney to get information about a title loan company to see if they used what is called a “list serve” to serve them with summons.  What I found is that the owners of the company, in Illinois, also own a used car lot in the State of Georgia.   Title loan companies make loans that people cannot repay because of the high interest, then take possession of the vehicle.  So, it seems that this one such company was creating inventory for its own used car business.

In other words, I learned that such companies can be shady.

After watching David Allen’s video (posted below), I did a Google search and found a site titled Consumer Affairs with stories by people who made payday loans, and the low things that they pull on people.  It saddens me that companies stoop that low, but also saddens me that the general population does not know enough about the law so they do not become emotionally distressed when getting those calls. 

For example, one person who posted a complaint said that they had filed bankruptcy, but the company said he/she was still liable.   Under bankruptcy law, there is redress when a creditor seeks to recover a discharged debt or violates the automatic stay.   If that individual used an attorney to file bankruptcy, he/she should have immediately contacted that attorney.

As another example, State or District Attorneys decide whether check fraud was committed. When a contract is involved where money is loaned with a promise to pay, it is civil matter.    The lowdown collectors told them that they would be arrested without bail.   Debt collectors are not people in the black robes who issue warrants and hold bail hearings.  The people posting complaints did not appear to know that if they wanted to stump the collector, just ask for the citation of the statute they have been charged with violating.

When in doubt, call an attorney.

If you know anyone who has taken out a payday loan, the following video is a MUST WATCH.  David Allen addresses why this case carries nationwide importance.






Posted on 03/31/2016, in Cases, Potpourri and tagged , , , . Bookmark the permalink. 39 Comments.

  1. I hate these places. Our city has tons of them.

    Liked by 3 people

  2. Mr. Militant Negro

    Reblogged this on The Militant Negro™.


  3. Thanks for this, Xena. Interesting. “My people perish for lack of knowledge.”

    Liked by 2 people

  4. yahtzeebutterfly

    What nasty, pure slime operators!

    Liked by 2 people

  5. It’s very expensive to be poor.

    Liked by 5 people

  6. Robbing bastards… all of ’em! That interest rate is astronomical… they should be charged for extortion!

    Love the vid… very important case indeed and not one I will forget all too easily, even though I’ve never been stupid enough to take out a pay day loan… still useful to know. 😉

    Liked by 2 people

  7. My Mom made a mistake of paying $ 432. 25, instead of $432. 27 , an error of 2 cents, but was charged $ 25 on her next bill.

    Liked by 4 people

  8. I used to use one all the time. My paycheck just didn’t quite make it, so I would borrow $200 every time until payday. I always knew I could pay it back. I hated the fact that I paid that kind of interest, but I was a single parent and had to feed my child – and I always knew from one pay day to the next that I could pay it back. I NEVER took out more than I could pay back, I never took more than $200. It became almost a way of life for a couple of years. If I had not had a job or if something had ever happened that I would have to have taken out more, I would never have made it. It was a lousy thing to have to do – I sure could have used that interest, but I did what I had to do at the time. I do NOT recommend them.

    Liked by 3 people

    • yahtzeebutterfly

      Sounds as if it was a rough time for you. You were smart and organized with your hard work to make it through and not get trapped by those lenders. Kudos to you, Rachael!

      Liked by 1 person

  9. yahtzeebutterfly

    Even when states step in and ban high cost loans, the loan companies find ways to continue their business.

    “How Payday Lenders Bounce Back When States Crack Down”



    The state-by-state skirmishes are crucial, because high-cost lenders operate primarily under state law. On the federal level, the recently formed Consumer Financial Protection Bureau can address “unfair, deceptive, or abusive practices,” said a spokeswoman. But the agency is prohibited from capping interest rates.

    In Ohio, the lenders continue to offer payday loans via loopholes in laws written to regulate far different companies—mortgage lenders and credit repair organizations. The latter peddle their services to people struggling with debt, but they can charge unrestricted fees for helping consumers obtain new loans into which borrowers can consolidate their debt.

    Today, Ohio lenders often charge even higher annual rates (for example, nearly 700 percent for a two-week loan) than they did before the reforms, according to a report by the non-profit Policy Matters Ohio. In addition, other breeds of high-cost lending, such as auto-title loans, have recently moved into the state for the first time.

    Liked by 1 person

  10. butterflydreamer2

    As far as the bankruptcy, if they took out a loan or charged on a credit card, or wrote a bad check during the time they filed bk and went to court, they are liable for the debt. Also anything they did not advise the attorney, they are liable. So if they forgot to tell the attorney about a credit card, loan, check, ect., and it goes to court, so sorry.

    Fyi, credit card companies not only make $$$$ off of people with bad credit in interest, they know many can’t pay the payments when extending them credit, and although they can’t go over the limit when charging, if they are close to limit and late, they now get a late charge that then makes them over the limit, and are then charged that fee then. (ex, $30 past due, $30 over the limit).


    • Hey Butterflydreamer! So good to see you.

      The person did not say if they took out the loan while the bankruptcy case was pending. If they forgot to add a creditor, their attorney could file an amended petition.

      What you share about credit card companies causes me to tremble. Funny that you mention bankruptcy and credit card companies, because the last bankruptcy reform, in part, was to help the credit card companies. They complained that too many people filed chapter 7 when they could afford to pay something on their debts.


  11. Many people who get payday type loans are backed into a corner and usually don’t have much of a choice. Either they have an emergency situation such as an electric bill or heating bill that has to be paid and they have bad credit or some other bad spot to be in. That’s why there are so many of these places in low income neighborhoods.


    • Abby,
      Thanks for the reblog. The interest rates on payday loans are very high. Some of those who take out payday loans don’t realize that the amount remaining on their next check after paying the loan puts them further behind financially.

      Depending on the city, their offices are also located in areas that have bars and strip clubs.


    • Thanks for the reblog. I just read your recent post and it is very informative. Yes, people should always read the fine print.


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