Payday and Money Tree

If you found yourself in need of some quick cash, then payday loans and services like Money Tree might have popped into your head for these unexpected expenses.

However, these loans come with high interest rates and steep fees, making them a risky choice for many people in Olympia, Washington. This is why it’s important to understand the risks involved and the legal protections available under Washington State law.

Bankruptcy attorneys in Olympia can help you and guide you through debt relief options if you are struggling with payday loans.

Simply put, payday loans are short-term loans that are due on your next payday. These smaller loans are often used to cover urgent needs you may have or unexpected expenses like medical bills, sudden car repairs, or other emergencies.

Some key characteristics of payday loans:

• Short-term repayment: Usually due within two weeks and often falls on your payday
• Small amounts: Loan amounts range from $50 to $1,000
• High fees and interest: Interest rates can be extremely high—up to 400% APR in some cases
• Easy to qualify: Limited requirements, such as proof of income and a checking account

In Washington, payday lending is regulated by the Washington State Department of Financial Institutions (DFI).

The Revised Code of Washington (RCW) 31.45 outlines the rules for payday loans, including limits on fees and interest.

• RCW 31.45.073 outlines that payday loan fees are limited to $1 per $5 loaned, and you are limited to a loan term of 45 days.
• RCW 19.52.020 prohibits your lenders from criminally prosecuting you for failing to repay your loans. It also prevents illegal and aggressive collection practices against you.
• RCW 31.45.090 requires payday lenders to provide clear information about fees, repayment terms, and loan conditions before you even agree to the loan.

Despite these regulations, the high costs of these loans can quickly spiral you into financial trouble, especially if you can’t pay them back on time.

Money Tree is one of the well-known payday lenders in Olympia. While these services may look appealing for some quick cash, you have to remember the high fees.

Money Tree Loan Options in Olympia:

• Payday Loans: Short-term, high-fee loans with repayment due on your next payday
• Installment Loans: Loans that allow you to repay over time with interest
• Title Loans: Loans secured by the title of your vehicle
• Check Cashing Services: Cashing of personal checks, typically with a fee

• Debt Cycle: Many people in Thurston County who take out payday loans struggle to repay them on time and often have to roll over the loan or take out another payday loan to pay off the first one. This creates a cycle of debt that can be hard to break.
• Compounding Interest: The short repayment term and high interest rates can make it challenging to repay the loan in full. As a result, interest continues to accrue, which adds to the overall cost.
• Impact on Credit Score: Late payments or loan rollovers can negatively affect your credit score, making it harder to access credit in the future.

Seek the help of a skilled bankruptcy attorney who can provide solutions that involve discharging or restructuring your debts if you are struggling with payday loan debt in Olympia or elsewhere in Thurston County.

When your payday loan debts become unmanageable, bankruptcy is a solution.

Chapter 7 Bankruptcy

• Debt Discharge: Chapter 7 bankruptcy eliminates most of your unsecured debts, including payday loans.
• Qualification: You must pass the means test to qualify, which compares your income to the Washington State median.
• Asset Liquidation: Some of your assets may need to be sold to pay your creditors, but Washington State exemptions are in place to protect your essential assets, such as your home, car, and personal belongings.
• Timeline: It is typically a fast process and usually only takes three to six months from filing to discharge.
• Best For: Those with low income and overwhelming debt who need a fresh start.

• Structured Repayment Plan: In Chapter 13 bankruptcy, your debts are organized into a three- to five-year repayment plan based on your income.
• Keep Your Assets: Unlike Chapter 7, you can keep your home, car, and other property while making your monthly payments.
• Debt Reduction: Some of your debts can be reduced or even eliminated after you complete the repayment plan.
• Income Requirement: It requires that you have a regular income to ensure you can make the monthly payments required of the plan.
• Best For: Those who earn too much to qualify for Chapter 7 or want to avoid foreclosure or repossession.

A bankruptcy attorney in Olympia can help you determine the right path for you based on your current financial situation.

Payday loans and services like Money Tree may seem like a good idea in the moment when you find yourself in dire need of quick cash, but you need to remember that they come with a lot of risks, which can lead to long-term financial consequences.

Consulting skilled bankruptcy attorneys in Olympia is a good first step. We can help you understand your options and create a plan that will help you regain control of your finances. By understanding the legal protections available to you, you can make more informed decisions about your financial future.