Are Payday Loans Debt Traps?

The Consumer Financial Protection Bureau (CFPB) recently issued a report finding that payday and deposit advance loans lead to a cycle of indebtedness for many consumers. What is supposed to be a short-term, emergency loan turns into a long-term, expensive debt burden. According to the report, many consumers repeatedly roll over their payday and deposit advance loans or take out additional loans; often just a short time after the previous one was repaid. This means that large shares of consumers end up in debt cycles of repeated borrowing and incur significant costs, making these loans quite expensive and not suitable for sustained use.

See the full report here: https://files.consumerfinance.gov/f/201304_cfpb_payday-dap-whitepaper.pdf

If you are caught in a cycle of debt due to payday or deposit advance loans, debt settlement is one option to end that cycle. A qualified debt settlement attorney will skillfully negotiate for large reductions in your payday loan debt, without the need for bankruptcy. The attorney can also settle your other debts such as credit card debt, auto loans, mortgage debt, etc. Contact a debt settlement attorney today to get started.


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Kevin Fallon McCarthy

Kevin Fallon McCarthy is the McCarthy Law PLC’s managing attorney and an experienced Phoenix debt attorney. Mr. McCarthy has also worked as general counsel for a large corporation. He has corporate counsel experience in human resource matters, general corporate governance, and union class action litigation.