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ADVERTISEMENT PAYDAY LOANS IN WISCONSIN Provided by: CRANDALL LAW OFFICES, SC
Payday loans are short term, high interest loans, typically for under $1,000.00. Often the loans are secured by a postdated check. Others are secured by your automobile. Most payday loans feature annual interest exceeding 300%, with some even exceeding 1,000%. Payday loans are often made without any consideration of the consumers ability to repay the loan. When the consumer fails to repay the loan, the extraordinary interest keeps on piling on. In fact, payday lenders make most of their profits on consumers who roll over their loans for months, even years. While there are a few "mom and pop" payday lenders, most are owned by large financial institutions and/or wealthy individuals. WILL THE PAYDAY LENDERS SUE ME IF I DON'T REPAY THE LOAN? Many do. Others sell the accounts to debt buyers (who also may sue), still others report the unpaid accounts to credit bureaus. Many states such as Wisconsin have a six-year statute of limitations within which a creditor may sue to collect on an unpaid loan. Once a judgment is entered in a Wisconsin court, it is valid for 20 years. WILL THE PAYDAY LENDERS REPORT ME TO CREDIT BUREAUS? Many do. Some sell the accounts to debt buyers who also may report the unpaid accounts to credit bureaus. Negative information about an unpaid loan may be reported to a credit bureau and remain on a credit report for seven years. IF I AM SUED BY A PAYDAY LENDER, WILL INFORMATION ABOUT THE LAWSUIT BE IN THE NEWSPAPER? Possibly.
Lawsuits are public-record. Anyone can go to the courthouse and review and/or
copy the entire contents of your file. In addition, there are a number of
business newspapers around the county that publish complete lists of lawsuits.
Also, some local newspapers have been publishing lists of local residents who
have been sued by payday lenders. ARE THERE DEFENSES? There are several potential defenses to a payday loan suit. The following is a non-exhaustive, partial list of common defenses. First, the Federal Truth in Lending Act (TILA) requires that payday lenders provide you with certain disclosures at the time the loan is made. Where full and complete disclosures are not made, you may be entitled to actual damages, and, in some cases, statutory damages up to $1,000. Of course, in the case of a lawsuit filed by a payday lender, these rights can be used defensively in the proceeding, although there are time limits on raising these defenses. Second, Wisconsin law prohibits abusive conduct by all lenders, including payday/auto title loan lenders. Swearing, name-calling, lies, and other abusive misconduct is expressly prohibited. Payday Lenders who violate these consumer protections may be liable for damages. Third, Wisconsin law restricts self-help repossession. This means that in some instance's lenders must FIRST obtain an order from a Circuit Court Judge PRIOR to repossessing your vehicle, where the amount of the loan is less than $25,000.00. In other cases, lenders may be required to give you a notice of default prior to repossession. Payday/auto title loan lenders who ignore these consumer protections may be liable for damages. Fourth, Wisconsin law prohibits certain terms in any consumer credit contract, like the contract you probably signed with the payday/auto title loan lender. Disadvantageous terms such as attorney fee shifting, governing law (other than Wisconsin), distant forum, and arbitration clauses may not be used by payday/auto title loan lenders in their form contracts. Payday/auto title loan lenders who unlawfully use such terms may be liable for damages. Fifth, the Wisconsin Consumer Act and the Wisconsin common law doctrine of Unconscionability generally limit the amount of interest that a creditor, such as a payday/auto title loan lender, may charge a Wisconsin consumer. It is possible that the interest charged by the payday lender in your case may violate these laws, and the payday lender may be liable for damages. Finally, Wisconsin law restricts the manner in which a creditor may garnish your wages, and some payday lenders are not familiar with all of the legal requirements needed to validly garnish a consumer's wages. If you were sued by a payday lender, had a judgment entered against you and later had your wages garnished, you may have a claim for damages. WILL BANKRUPTCY HELP? Potentially. The primary benefit of a bankruptcy filing is the imposition of the automatic stay, a court order that freezes any collection activity on a payday loan. There are two types of proceedings in bankruptcy most commonly used by individuals. Chapter 7 - This is the type of case most people think of when they hear the word bankruptcy. You may also hear it referred to as a "straight liquidation case." In this type of case, you list your assets, debts, and certain relevant transactions. If your bankruptcy is successful (almost all are), you will receive a discharge. However, while the automatic stay delays a lenders right to enforce its lien against collateral such as a motor vehicle, neither the stay nor the discharge eliminate it. Chapter 13 - In this type of case, sometimes referred to as a "wage-earner plan," you present to the court a plan for paying off your debts gradually over a period of time, generally three to five years. A portion of your paycheck will go to the Chapter 13 Trustee and he or she will divide that money among your creditors. In the meantime, the payday lender cannot continue its suit, either for damages or to repossess your automobile. WHAT KIND OF ASSISTANCE PROGRAMS ARE AVAILABLE? Unfortunately, there are few government or social programs available to help rid yourself of these loans. The following are some of the programs typically available. Credit Counseling - These organizations typically advise individuals and families on how to budget, spend and save money. Social Organizations - As with credit counselors, some social organizations offer credit counseling. These organizations also may have other resources to help you. Government Agencies - When a payday lender violates state or federal law in the making of its loans, a consumer may seek the help of the appropriate state or federal agency. For violations of Federal law such as the Truth in Lending Act, contact the Federal Trade Commission in Washington, D.C. In addition, you can initiate a lawsuit against any payday lender who has violated the TILA. You can recover your actual damages, costs, disbursements and reasonable attorney's fees, and statutory damages of up to $1,000.00 per lawsuit. For violations of Wisconsin law such as the Wisconsin Consumer Act, contact the Wisconsin Department of Financial Institutions. In addition, you can initiate a lawsuit against any payday lender who has violated the WCA. You can recover your actual damages, costs, disbursements and reasonable attorney's fees, and statutory damages of up to $1,000.00 per lawsuit. WHERE CAN I GET MORE INFORMATION? For more information, visit these websites: |
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