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Payday Loans and Bankruptcy

Payday loans are a tempting option for anyone strapped for cash. They seem simple enough: borrow a few hundred dollars to get you through until your next paycheck, which is likely just a few days or weeks away. Pay back the money quickly and there’s very little interest due.

Unfortunately, these loans are designed to seem helpful, but are actually one of the worst financial crutches you can use.

Payday loans are short term loans. Though the fees associated with them might seem reasonable, they are usually exorbitantly high. The trick is in how the fees are presented to you. Lenders claim to charge “only $10” or only “$20” per every $100 you borrow, but this equates to an annual percentage rate of several hundred percent. Some payday loan rates are as high as 2000%.

And these are the rates you pay if you manage to pay the loan back on time – something that is fairly uncommon in the industry. Unpaid loans are “rolled over” into new loans that have interest tacked onto the principal, which enables the lender to charge an even higher amount the next pay period. The longer you go without paying your loan the higher it goes at a rate that makes most people’s heads spin.

Making matters worse, payday lenders tend to be very aggressive when it comes to collections. After all, they stand to lose a lot of money based on the system they’ve created. You’d probably fight hard too for a profit this significant!

Lawmakers have recently begun to take action against predatory payday lenders, but the problem isn’t completely solved. For more information on what’s been done recently, check out this articles from NPR.

How Can You End the Payday Loan Cycle of Debt?

Ideally, you’ll never be tempted by a payday loan. They are issued by unscrupulous lenders and designed to take advantage of someone in a difficult position. If you’re considering a payday loan as an alternative to filing for bankruptcy, think twice and at least speak to a bankruptcy expert before visiting a payday lender.

If you’ve gotten in too deep with payday loans, you have options. Most people are able to eliminate their unsecured debt when they file for bankruptcy, which means many payday loans are discharged. An exception is if you secured your payday loan through fraudulent activity – something that rarely occurs.

Though it might seem easy enough to file for bankruptcy on your own and deal with payday loan debt without hiring an attorney, this is risky. Filing for bankruptcy makes you vulnerable and without proper guidance, your vulnerability can lead to the loss of your assets and financial savings. With the assistance of a bankruptcy attorney, you’re able to protect your assets and eliminate or put a plan in place for your debt, including your payday loans.

If you’ve gotten into trouble with payday loans or you are dealing with any other type of debt that has spiraled out of control, we can help. Contact us at the Law Offices of Robert M. Geller at 813.254.5696 to schedule a free consultation or to begin the bankruptcy process.

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$Law Offices of Robert M. Geller, P.A.
807 West Azeele Street
Tampa, FL 33606
T: (813) 254-5696
T: (800) 853-7549
F: (813) 253-3405


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$Law Offices of Robert M. Geller, P.A.
125 5th Street South
(Wells Fargo Financial Center)
2nd Floor, Suite G

St. Petersburg, FL 33701
T: (727) 532-3939


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Pasco Office

23526 State Road 54
Lutz, FL 33559
T: (813) 336-2320





Maps & Directions

At the Tampa Bay law firm, the Law Offices of Robert M. Geller, P.A., we help people with consumer bankruptcy matters in the Tampa Bay-St. Petersburg,  Florida communities such as Clearwater,     St. Petersburg, Tampa, Thonotosassa, Riverview, Lutz, Plant City, Brandon, Carrollwood, Wesley Chapel, St. Petersburg Beach, Lakeland, Mulberry, Dade City, Pinellas Park, Largo, Seminole, Odessa, Oldsmar and Lithia, and counties such as Hillsborough County, Pinellas County, Pasco County, Polk County and Manatee County.