In a word, DON’T take them, if you haven’t already.

Payday loans are a form of financial cancer, primarily invading economically disadvantaged areas.

With interest due over a 2-week period of 30 percent or more, the annualized rate is upwards of 800 percent, not including fees. A loan from a friend, or an advance on your paycheck, or a cash advance on your credit card are all vastly preferable to taking out a payday loan.

Many low-income borrowers fall into a vicious cycle of taking an additional payday loan to pay off the previous one, coming to rely on these loans as their source of income. This is a toxic pattern, soon leaving the borrower completely unable to repay. Many lenders will ask for a post-dated check as collateral on the loan, and threaten the borrower with criminal prosecution and jail for having written the bad check in the event of default or bankruptcy.

Payday loans are unsecured debt and can be wiped in a Chapter 7 filing, or restructured and mostly wiped in a Chapter 13 filing. Lenders may attempt to challenge the discharge of the loan, claiming the borrower never had intent to repay. Courts may find that the original loan in a series of payday rollover loans was earlier than the 90-day limit preceding bankruptcy required by law to wipe a debt in a bankruptcy settlement.

If you have taken a payday loan, it’s a good idea to wait until 90 days after the due date on the last of them to file for bankruptcy.

Payday lenders are often unscrupulous and predatory in their sales and collection practices.

If you’re in trouble with a payday lender, or fallen into the vicious circle of payday rollovers, Todd Murphy Law can help.