California readers may be surprised to hear that people in our state lost more than $135 million annually to payday loans. Much of this loss comes from the high interest rates charged to those in need of these types of loans. Many of those seeking payday loans here ultimately file for a personal bankruptcy due to the economic stress that led to the need for such loans and to the high interest charged.
California is one of the states with the dubious distinction of having the highest interest charges for payday loans. Across the country, there are some 22,000 payday loan centers. These facilities cater to those who have suffered during the recent recession due to issues such as job loss, falling home process and high mortgage payments.
In fact, a recent report notes that the national economy loses almost a billion dollars annually to these types of loans. The people who take them out do so to help maintain their lifestyle despite the changing economic outlook. When that effort fails, many find relief in a personal bankruptcy.
The good news for some readers in California is that a personal bankruptcy can allow them to begin a fresh financial future. This comes due to the debt discharge that occurs when a successful personal bankruptcy is formally discharged. This typically includes much of the unsecured debt formerly held by an individual. Because of the sometimes confusing nature of the bankruptcy process, many find it helpful to gain a working understanding of the applicable provisions of the Bankruptcy Code to ensure that the proper Chapter is used in order to achieve optimal results.
Source: atlantadailyworld.com, "Payday Lending Drains Nearly $1 Billion From Communities," Charlene Crowell, April 1, 2013