Goldman & Beslow LLC
East Orange: 973-677-9000
Paterson: 973-247-9445
Jersey City: 201-659-6226
Toll Free: 888-827-5493
FREE Initial
Consultation Se Habla Espanol
Go to Practice Area Categories

How to avoid payday loans and other scams after bankruptcy

Filing for personal bankruptcy is not uncommon for residents of New Jersey and elsewhere. However, it is more common to still believe that the future is dire for those who have gone through such an ordeal. What kind of loan can someone hope to obtain after a bankruptcy? The belief that one's financial situation is ruined forever because they had to file for Chapter 7 or Chapter 13 may be discouraging and lead some to make poor decisions in the months and years to come.

It is true that a bankruptcy will stay on someone's credit report for up to 10 years, states Bankrate. This may affect the ability to get a loan and rebuild credit for some time, especially if one makes poor spending decisions while recovering from financial challenges. These could include not paying monthly bills on time, spending above one's means and having too much outstanding credit. Additionally, it can be all too easy to fall into the trap of payday loans.

Why are payday loans a bad idea?

Those suffering from financial challenges are often lured into taking out a payday loan to cover a bill or unexpected expense. Payday lenders will often extend a small loan to anyone with an income, regardless of their credit history. They make it seem like these loans are a quick and easy way to get fast cash and pay it off by the next paycheck. Unfortunately, most borrowers find that they need more money to cover expenses after the loan is repaid - and thus the payday loan cycle has started. Even worse, borrowers soon find out that the interest rate tacked onto a payday loan - sometimes as high as 300 percent annually - is crippling. Many states have laws against this type of lending to protect consumers, but lenders have gone around it by offering quick cash online.

There are, of course, many alternatives to covering bills and paying off debts without falling prey to this type of lender. These can include the following options:

  • Obtaining a secured credit card or small loan from a credit union or reputable lender
  • Getting a temporary part-time job or asking an employer for overtime to make extra money
  • Negotiating with lenders for a manageable repayment plan
  • Asking family members or friends for a small loan
  • Waiting until the money is saved before making a purchase
  • Getting a cash advance on a credit card, which is usually better than a payday loan's interest rate

Wise borrowing after bankruptcy

Personal bankruptcy may give consumers a fresh start, but they may continue to have financial challenges for a while after a bankruptcy discharge. It is important to know that many banks are willing to extend credit with reasonable rates to people after a bankruptcy, which is a much better option than becoming trapped by the exorbitant rates of a payday loan. An experienced bankruptcy attorney in East Orange may be able to advise you on how to move on after a bankruptcy.

PRACTICE AREA CATEGORIES

Tell Us About Your Case

Bold labels are required.

Contact Information
disclaimer.

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

close

PROFESSIONAL ASSOCIATIONS

  • NACBA | National Association of Consumer Bankruptcy Attorneys
  • NACA | National Association of Consumer Advocates
Review Us
Goldman & Beslow LLC

Goldman & Beslow, LLC is a Federal Debt Relief Agency by an Act of Congress. We have proudly assisted consumers seeking relief under the U.S. Bankruptcy Code for over 38 years.

qr code

EAST ORANGE
OFFICE
7 Glenwood Avenue,
Suite 311B
East Orange, NJ 07017
East Orange Law Office

Phone: 973-414-8069
Phone: 973-419-7631
Phone: 973-419-5266
Phone: 201-205-2496
Toll Free: 888-827-5493
Fax: 973-675-5886
E-mail the firm

NEWARK OFFICE 168 Bloomfield Avenue
Newark, NJ 07104
Newark Law Office

Phone: 973-483-1333
Phone: 973-419-5266
Phone: 201-205-2496
Toll Free: 888-827-5493
E-mail the firm

PATERSON OFFICE 100 Hamilton Plaza,
Suite 405
Paterson, NJ 07510
Paterson Law Office

Phone: 973-247-9445
Phone: 973-419-5266
Phone: 201-205-2496
Toll Free: 888-827-5493
E-mail the firm

JERSEY CITY OFFICE 26 Journal Square,
Suite 603
Jersey City, NJ 07306
Jersey City Law Office

Phone: 201-659-6226
Phone: 973-419-5266
Phone: 201-205-2496
Toll Free: 888-827-5493
E-mail the firm

Back to Top