Articles Tagged with Payday Loans

I have found it helpful to share this checklist with people who call asking me “Should I file bankruptcy?” In a nutshell, if more than two of the following issues apply to you, it is possible that bankruptcy would be an option worth investigating further:

  • Debt collectors are calling you at home or at work.
  • You are utilizing payday loans to make ends meet.
  • Your wages will soon be garnished or are being garnished now.
  • Your bank account has been frozen.
  • The majority of what you owe is unsecured debt like credit cards, medical bills, payday loans, etc.
  • Your facing the threat of foreclose on your home.
  • The foreclosure process on your home has already started.
  • Your facing possible repossession of your vehicle.
  • You have had a vehicle repossessed.
  • You want to give up your house or vehicle and walk away without owing any money.
  • Your bill payments are more than 30 days behind.
  • You have been sued or are being sued over debt.
  • You have a significant amount of medical debt that will not be covered by insurance.
  • You have medical insurance but can’t afford to pay your share of the bills.
  • You owe income taxes that you cannot afford to pay.
  • Your total debts (other than house & car) are more than you could pay and still live, even over five or more years
  • You have high student loan deb, cannot defer payment any longer, and the notes are more than you can pay

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Stop – if you are thinking of filing bankruptcy – do not do any of these transactions until you have spoken with me. Waiting a few days will not matter. “Better to be safe than sorry.”  There is a right way to do things before you file bankruptcy, but there are also a whole lot of wrong ways to do things. Some actions could get you into a lot of trouble.  Put it on hold and let me give you the information you need to understand your options.

  • Don’t pay back money you owe to family members.
  • Don’t pay your friends back money you owe them.

payday-loansUnder the Mississippi Check Cashers Act, the maximum amount you can borrow is $400.  For example, a borrower writes a check for $400, pays the $72 fee, and receives $328 in cash.  You may have more than one payday loan with a lender; however, the total amount may not exceed $400 (including the fee). It is illegal to write a payday check for more than $400.

Mississippi law allows a lender to charge no more than $21.95 for every $100 dollars borrowed.  It is illegal to renew, extend or rollover your payday loan by just paying the fee. The payday loan must be completely paid in full before you can enter into another payday loan transaction.

If your check is deposited and returned unpaid, the lender may charge you only 1 NSF fee and only if it was disclosed in the agreement.  If the court awards a judgment to the lender against you as a result of your returned check, the lender may recover court costs, attorney’s fees as well as any court awarded fees.

dollarsPayday loans are also referred to as cash advance loans, delayed deposit loans and deferred presentment loans.  In a payday loan, a borrower writes a check to a lender in exchange for a short-term cash loan.  The lender does not cash the check until the borrower’s next payday, up to 30 days.

The lender will require you to sign an agreement disclosing the amount of money you have requested, the Annual Percentage Rate (APR) as well as other related information.  The lender will also require you to give them a personal check with an amount that reflects the loan plus the fee.  The agreement may authorize the lender to automatically withdraw the funds from your bank account.  You may redeem the check on or before the due date, which can be up to 30 days, if not, your check may be deposited or the loan amount will be automatically withdrawn from your account on the due date.

Warning:  You are responsible for evaluating whether a payday loan is right for you. Payday loans are not intended to meet your long-term financial needs.  The long-term use of payday loans may cause severe financial hardship.