Law Office of Rick Morin, PC

I have been seeing more and more clients with large debts from online loan companies. These loans are proving to be toxic and a fast track to the bankruptcy court.

In a financial jam, a quick infusion of cash might seem like just what the doctor ordered. And in some cases, this is absolutely true. But before accepting a loan, you must first determine whether the terms of the loan are going to cause more pain than they are worth.

Spurred by incessant advertising on TV and the internet, many of bankruptcy clients have at least one unsecured loan through a payday loan company or online lender. These loans carry interest rates in excess of 100% per year. At such a high interest rate, it is nearly impossible for these clients to ever actually repay the loan. I am quite frankly surprised that these abusive loans are even legal — but they are.

The terms of these loans are not the end of the problems either. Most of the loans require the debtor to authorize the lender to automatically withdraw loan payments directly from the debtor’s checking account. In some cases, these payments are scheduled once a week. And because the interest rates on these loans are so high, these payments don’t actually make much of a dent in the principal balance owed to the lender.

Taking out these high-interest loans is typically a desperate move to stay afloat. But no one should have to borrow money on such outrageous terms. Once the online lender starts deducting money each week from a person’s checking account (often putting them negative), the next step is usually a call to my office for bankruptcy.

Bankruptcy can get you a fresh start with your finances. I can get you out of the never-ending cycle of predatory payday and online loans. If you find yourself depending on these toxic financial products to get by, you probably already know that bankruptcy is the real solution to your debt issues.

Please call my office at (916) 333-2222 to discuss what bankruptcy can do for you. You will be surprised by how quickly and easily my office can help rein in your financial issues.