Many people live paycheck to paycheck. Indeed, it may even be the norm. There is no shame in that in post-Recession America; it’s simply a reality for millions of us.
But what do you do when there isn’t enough money to pay the bills before the next paycheck is due? The financial pressures can be overwhelming, with groceries to buy, rent or a mortgage to pay and so on. Add in medical debt or some other unforeseen emergency and the pressure gets even stronger to find money somehow to make ends meet.
Payday loans — as they are rather neutrally called — come in to fill that void, the gap between the money you have and the bills you have to pay. But the interest rate on payday loans is notoriously, sometime abusively, high. In this post, we will discuss some of the concerns about companies that offer these loans in Texas.
Last spring, Texas legislators considered imposing new statewide restrictions on payday lenders. But nothing passed the legislature.
The problem of the proliferation of payday loan companies therefore continues unabated. These companies sometimes charge rates of up to 500 percent — or even more than that — to people who take out loans to make ends meet until their next paycheck.
It isn’t only the sheer size of the interest rate that is a problem, either. There are also problems with excessive fees, hidden in the fine print of the payday loan.
Similar problems also occur across Texas with auto title lenders. The number of Texans who lost their cars to auto title lenders last year was in excess of 35,000. That is obviously a lot of people. It is nearly double the capacity of the San Antonio Spurs’ AT&T Center.
Clearly, then, it makes sense for Texans who rely on payday loans to consider options for debt relief. And as we discuss week after week in this blog, a bankruptcy filing is one such option.
Source: Midland Reporter-Telegram, “Payday loan sharks are still circling desperate borrowers,” Paul Davis, Oct. 25, 2013