It used to be when a person needed a loan, he or she visited the bank, discussed terms, and either received or did not receive the money, based on the discretion of the banker. When people realized there was money in lending, it became big business. This enabled many who were previously unqualified to get loans to borrow money, but it also put many people at risk.
There still are plenty of credible lenders that want to help people achieve their dreams by lending, but there are also those who want to take advantage by lending people money they cannot afford to borrow. These predatory lenders are only interested in making a profit, even if it means acting deceitfully and preying on the desperation some feel about money.
Many people who file for bankruptcy were victims of predatory lending practices. They were convinced they could afford to do something beyond their means and they are now facing the consequences. The term “predatory lending” applies to a number of deceptive practices that treat consumers unfairly, and in many cases, it leads a person down the path toward bankruptcy.
What Can You Do to Avoid becoming a Victim of Predatory Lending?
• Predatory lending is frequently found in the housing industry. If you have never purchased a home and you are unsure of the process and how to calculate what you can afford, attend a housing counseling program approved by the US Department of Housing and Urban Development.
• Take time to research any loan you consider and compare it to other options available.
• Avoid loans that feature “balloon payments” that seem appealing at first, but gradually or suddenly increase.
• Avoid loans featuring a pre-payment penalty. If you have the means, you should be able to pay in full any loan without penalty.
• Never sign blank documents and always read all of the paperwork provided to you. Question anything related to unusual or hidden fees, high interest rates, fees, and misrepresentation of your credit rating.
Essentially, if anything seems unusual or makes you uncomfortable, dig deeper before signing on the dotted line.
To learn more about predatory lending laws, visit debt.org.
What If You are Suffering as the Result of Predatory Lending?
The good news is you can recover from a financial mistake, whether it’s related to predatory lending or otherwise. The key is to work with someone who is familiar with laws regarding loans and who knows how to help people who are in debt.
If you are facing financial struggles as a result of predatory lending or you are tired of the distress and embarrassment debt is causing you, we can help. Contact the Law Offices of Robert M. Geller at 813.254.5696 to schedule a free Tampa Bay bankrupcy lawyer consultation.