Woman Borrows $200 From Payday Loan. Guess What Happened Next?
I’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 collectors, David Allen, lawsuit, payday loan. Bookmark the permalink. 39 Comments.
I hate these places. Our city has tons of them.
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Hey Paws2smile. They pop up everywhere, and I cringe each time I see one of their commercials.
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Reblogged this on The Militant Negro™.
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Thanks for the reblog, dear friend.
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My pleasure, it was very good to talk with you on Twitter.
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Mr. Militant,
Same here. Wish I could have stayed awake longer.
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Yes sleep is something that comes no matter what we are doing.
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Thanks for this, Xena. Interesting. “My people perish for lack of knowledge.”
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Hey Deanna!
That deserves repeating.
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Hey Xena! That’s Hosea 4:6. A similar one is Prov. 11:9b “…through knowledge shall the righteous be delivered.” (ASV)
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What nasty, pure slime operators!
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It’s very expensive to be poor.
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Mindyme,
Yes, it is.
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I tell people that all the time…
How backwards is that?
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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. 😉
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Sometimes when one is scraping up rent, child care, groceries and a car payment it’s more a matter of desperation than it is stupidity.
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A very valid point, and it’s those poor unfortunates that these bastards are preying on… there should be some kind of legal cap on the percentage rates they are allowed to impose.
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Hey Kev! I really like David Allen. He can pack loads of information into a 4 minute video.
And, you’re absolutely correct about those interest rates.
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He’s very impressive, Xena. 🙂
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Yes he is, Kev. And to think that he takes out time to do videos so that the general public will understand the law. That’s to his credit.
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Most certainly. 🙂
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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.
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Ren,
How awful of them to charge $25 for her 2 cent error.
That $25 is 1250 times 2 cents.
.02 X 1250 = 25
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I think she called the credit card company and complained. She said it was miswritten, and they shouldn’t have done that, for the sake of ” goodwill ” of a long-time customer. They listened and sent us a new bill.
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Good!!
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Ren,
Unbelievable! Had it been me, I would have given them a nickle, told them it was a reasonable interest rate and if they didn’t like it, to sue me.
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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.
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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!
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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”
http://www.psmag.com/business-economics/how-payday-lenders-bounce-back-when-states-crack-down-64535
Excerpt:
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Ohio?!?!?! The state where presidential contender Kasich is governor!
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Kasich, the kinder gentler wing nut
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Hey Mindyme. Each time I see Kasich on television, I ask myself why someone doesn’t ask him about Tamir Rice and John Campbell.
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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).
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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.
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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.
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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.
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Reblogged this on healthyeatinghabitsnow.
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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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