Payday Loans – A Short Term Loan That Becomes A Long Term Problem

If you have ever taken out a Payday loan, you probably know they are extremely hard to get rid of. Payday loans have become a huge industry able to charge unbelievable interest rates. Going on the internet I see interest from 243% to 782%!!

What the traps, What are the good options, and, busting the myths about Pay Day Loan?

We have seen people who borrowed small amounts of money, were not able to repay the loan, and soon found they owed thousands of dollars. The reality of most payday loans is you don’t have the money to pay them off by the next payday, and then you are trapped in never ending interest payments. You are an immediate candidate for either a Chapter 7 or Chapter 13 bankruptcy if you are:

  1. Unable to pay the loan off rapidly; or
  2. Continually refinancing the loan; or
  3. Using 2 or more Payday Loan companies; or
  4. Using Payday loans multiple times per year.


  1. Many lenders and collectors say you can’t file Bankruptcy on their loans: Yes you can.
  2. On the Internet there are good people who complain that they are being threatened with Arrest Warrants and Criminal action. You cannot be prosecuted for borrowing money and being unable to repay. We see it so much that it apparently works as a scare tactic. It shouldn’t. In fact threat of criminal action is a violation for the Fair Debt Collection Practices Act.
  3. If repayment is made through automatic deductions they tell you that you can’t stop the deductions: Yes you can.
  4. That if you file a bankruptcy within 70 days of borrowing money from a Payday Loan it will not be discharged. False: the 70 day period only applies to open ended loans (like credit cards) of $875 for more.


  1. Robert J. Adams & Associates have helped thousands of people being crushed by Payday loans. We should be able to help you too.
  2. While we generally advise waiting for a period of time after getting a payday loan we do not hesitate to file a Bankruptcy case when there are pressing matters (like a garnishment or a car repo or driver’s license suspension).
  3. The only real basis of fighting a Bankruptcy is if the Payday lender can prove the borrower never intended to repay the loan. This is very difficult. All of our clients so far have always intended to repay their loans but problems prevented them from doing so.
  4. Postdated checks. Some lenders will cash a check after the filing. This is a violation of the automatic stay and can subject them to penalties. We are aggressive on this issue.


When you file any type of bankruptcy, all creditors are required to stop taking your money or your property. Garnishments stop. Automatic deductions from your bank stop. And, since you often owe many other debts when you have a payday loan, bankruptcy gives you a means of handling all of the debt by either discharging the debt in Chapter 7 or reducing the debt in Chapter 13. You should not allow your car or your house payment to be held up by a payday lender trying to take your money.

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