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St Louis Bankruptcy: Why Do Payday Loan Companies Charge Such High Interest Rates?


Because they can. And there is absolutely no law stopping them from putting an outrageous rate of interest on their loans. It may be immoral, but it’s not illegal.

St Louis payday loan companies exist for one single goal: if you are having a difficult financial time in life, they want to give you all the high-interest, small loans you can handle (because they know that once you are on the hook, you will almost certainly not get them paid off). And once you are in that vicious cycle of payday loan debt (in which you take out a loan, only to turn around and take out yet another payday to cover the first one), it is extraordinarily difficult to get out of it. This exactly where they want you.

But the good news is that filing a St Louis bankruptcy will take care of these unsecured debts (along with any other creditors you might have, such as credit cards, medical bills, old gym memberships, overdrawn bank accounts, and utility bills). In fact, once a bankruptcy is filed, the court puts into place a total ban on all creditor activity (the so-called “Automatic Stay”). This means that after a petition for bankruptcy relief is filed with the court, creditors may no longer call you, they may no longer send you letters, they may no longer demand money from you (and they certainly can no longer garnish your wages, levy your bank accounts, or sue you for breach of contract).


And beyond that, federal law protects your interests when it comes to collection agencies (including third party collectors from payday loan companies). So if a collector comes onto the scene, you have the benefit of a great deal of federal consumer rights. And if those rights are violated (they frequently are), then the court has several remedies. For instance, if the collection agency violates your rights under the Fair Debt Collection Practices Act (FDCPA), then it must pay you up to $1,000 (which isn’t a lot, but it’s something); additionally, the law also states that you never have to pay an attorney any fees to uphold your rights because the collector must take care of any fees and costs that you might incur.

The affordable St. Louis bankruptcy attorneys at The Bankruptcy Company have been saving and protecting people’s assets for years. Our goal is to make sure that you keep the assets and property you want, discharge the debts that you want to get rid of, and do it all at an affordable cost to you. All phone conversations and office consultations are free of charge.

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