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Bankruptcy may be the best way to handle payday loan debt

Many hard-working American families find themselves in a repetitive cycle of overwhelming debt that has spiraled out of control. This is related in part to a poor job market, low hourly wages, health care insurance that refuses to pay for essential services and consumer over-use of credit cards to purchase inflation-ridden consumer necessities. One industry that has taken advantage of the struggles of these families is the predatory payday loan industry. The companies have in effect forced many consumers in Arkansas and throughout the country into filing bankruptcy to eliminate harassing debt collections from the companies and their assignees.

In some cases, the companies are also responsible for having thousands of fake collection claims filed against people who have never agreed to a payday loan. In fact, many fake claims have apparently been filed in Chapter 13 bankruptcies nationwide against debtors who never took out a payday loan. Federal authorities have arrested or indicted several leaders of the payday loan industry in connection with selling phony claims to debt collectors and for other illegalities.

Consumers should be wary of dealing with these companies, and should research all offers and companies that make attractive offers online prior to engaging in any transactions. The empire of payday loan lending, which has preyed on hard-working but financially desperate consumers for the past two decades, is reportedly falling apart. With the arrests and investigations by federal authorities, consumers who count these types of accounts as part of an overwhelming debt load may find that bankruptcy is the best remedy for their particular circumstances.

Indeed, consumers in Arkansas and elsewhere may find that they will spend a great deal of time and money trying to communicate across the mysterious walls set up by the payday loan companies. They will also find it difficult to escape the unending cycles of debt collections, some of them based on fake loans never issued, that these companies have spawned. A consumer facing this and other kinds of overwhelming debt will be well-advised to consult with a consumer bankruptcy attorney to learn the options available.

Source: pitch.com, "KC's dethroned online payday lenders aren't gaming the feds anymore", Steve Vockrodt, April 20, 2016

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