Predatory lenders have long been an issue in Tennessee, but the pandemic has made the problem even worse. Millions of Americans are still struggling to make ends meet, and find themselves in a position where they’ll do just about anything to pay the bills and keep food on the table. As a bankruptcy TN attorney, I know there are plenty of ill-intentioned lenders out there who prey on this kind of financial vulnerability. They offer seemingly-easy fixes like payday loans. Sadly, these ‘too good to be true’ predatory loans leave many Americans in a cycle of debt that they cannot get out of.
Fortunately, if you find yourselves in tough times, you can achieve financial relief without turning to predatory lenders. Bankruptcy is the answer you’ve been looking for. Read below to learn about the warning signs of predatory lending and the relief that bankruptcy offers.
What is predatory lending?
Predatory loans have misleading, unfair, or unaffordable terms. Though they may seem like the financial help you desperately need, they generally benefit the lender at the expense of the borrower. Rather than getting you out of financial trouble, they have the potential to trap consumers in a cycle of debt they have little hope of ever paying off.
For example, payday loans are typically seen as predatory because the costs can escalate quickly. But mainstream loans, such as auto loans and mortgages can also have predatory terms.
Warning signs of a predatory loan
1. The offer seems too good to be true. As a general rule, if a loan seems too good to be true, it probably is. If a loan claims to offer promises like fast cash, an ultra-low interest rate, or easy loan approval you should be wary. Read the fine print. The contract might reveal hidden fees and terms. For example, the interest rate may skyrocket after six months.
2. The loan has inflated fees and interest rates. A loan should have a realistic payoff plan. An acceptable interest rate for a small loan is about 36% or less. If the loan comes with “adjustable interest rates” that dramatically increase or fees that triple the total amount owed, stay away.
3. It’s not clear what the loan costs. It should be easy to identify the details of a loan before signing. The disclosure agreement should include a description of fees, term length, and APR. Steer clear if that information is not clearly presented to you.
4. The lender doesn’t directly answer your questions. Some predatory loan contracts are so hard to understand, it’s like they’re written in another language. If the lender you’re dealing with isn’t clear, don’t assume it’s because they know more than you, or that it’s just normal ‘financial jargon’. They might be masking important details on purpose, such as the true cost of the loan.
Find real relief with bankruptcy
Throughout my career, I’ve seen many predatory lenders take advantage of hard-working people. They turn someone who was just trying to get through a rough patch into someone facing a crushing mountain of debt. Unfortunately, if you default on a predatory loan payment you might be facing more trouble than just debt. Lenders can transfer your account to a third-party debt collector. This can mean non-stop phone calls, lawsuits, and even threats of arrests.
The real problem here is the long-term state of your finances. Through bankruptcy, a proven solution, you’ll never have to worry about predatory lenders or debt collectors again.
Contact a trusted Bankruptcy TN attorney today for FREE
These are tough times, and there may be even tougher ones ahead. If you’re struggling with debt and are considering a loan, consider bankruptcy instead. In a world with so much uncertainty, bankruptcy offers the stability you deserve.
As a bankruptcy TN attorney, it’s my job to help you take steps towards a better future. Contact us online or call (901) 327-2100 for a FREE consultation. We will discuss your situation, no strings attached, and come up with a plan to help you get out of the debt spiral.