A recent article published by the Southern Poverty Law Center reports that Alabama has more title loan lenders than any other state per capita. According to the SPLC article, there are four times as many payday lenders in Alabama than McDonald’s Restaurants. The high poverty level in Alabama draws these predatory lenders who prey on Alabama’s citizens who have fallen on hard times. Annual interest rates on title loans and payday loans can be as high as 300% to 456%. These loans are a never ending cycle to those that get trapped in them. You can find the entire publication here in a 44 page document full of testimonials from lenders and borrowers. It is quite an interesting read.
The article goes on to report exactly what myself and the other attorneys here at Bond and Botes see on a daily basis. Too many families live paycheck to paycheck and have nowhere to turn should an emergency or unexpected expense arise. That is how the payday loan cycle begins. A desperate borrower gets a loan with one of these type lenders to take care of their urgent issue at hand. When the due date comes for the loan, many borrowers do not have the disposable income and they are still unable to pay the loan in full and they being paying interest only, therefore, the debt continues to roll over. Many will go to another lender to take out a second or third loan just to keep up payments on other payday or title loans. Many of these borrowers see no way out but to seek bankruptcy assistance and for most this is their only option. Many should seek the protection of bankruptcy long before they do but try to keep up the struggle finally finding peace of mind under the protection of bankruptcy. The party line from the payday lending industry is that they serve a purpose for people who have nowhere else to turn. Really? Do they need to make interest that is beyond usurious and the bounds of decency? The Bible doesn’t seem to say agree.
If you are caught in the trap of predatory lenders or are suffering any other financial difficulties, please contact our office nearest you to seek help for immediate relief and peace of mind.
Amy K Tanner is a shareholder in several of the Bond & Botes Law Offices. She holds a Bachelor of Science from Auburn University at Montgomery, and a Juris Doctorate from Thomas Goode Jones School of Law. She focuses primarily on consumer bankruptcy law in the Huntsville and Decatur offices.Read her full bio here.