Payday and Money Tree

Payday loans are a popular short-term financial solution for many people in Tacoma, Washington. However, these loans can easily spiral out of control due to their high interest rates and fees.

If you find yourself drowning in payday or Money Tree loan debt and need help digging your way out, don’t hesitate to consult an experienced bankruptcy attorney in Tacoma to go over all of your available options.

Payday loans are short-term, high-interest loans that are designed so you can pay them back by your next payday (typically within 14 to 30 days). They are typically only available for smaller amounts (up to $700), but the associated fees and interest rates are extremely high.

As of 2025, Washington caps payday lenders at a 36% annual percentage rate (APR), which includes all fees. Currently, the finance charge for a 14-day $100 loan is $15.00, and the APR for that same loan is 391%.

Money Tree is just one of the more popular payday loan lenders in Tacoma, as they offer quick access to funds but can also create a cycle of debt for many people. Known for their physical locations in Tacoma, they provide quick approval times and easy access to cash.

Along with that quick access to funds, these loans also come hand in hand with some significant risks that could threaten your overall financial health.

• High Interest Rates: As we have already touched on, they carry interest of up to 391%. So, if you fail to repay the loan in time, that interest quickly compounds and can make it difficult for you to escape the debt cycle.
• Debt Cycle: This can also lead you to take out additional payday loans to repay the original loan, resulting in a debt spiral that makes it even more difficult to repay the loans.
• Credit Score Damage: If your payday loans aren’t paid on time, they can negatively impact your credit score. Also, it could mean some long-term consequences for your credit history if the lender reports those late or missed payments to the credit bureaus.

If you are overwhelmed by payday loans, filing for bankruptcy may be just what you need to get that fresh start. Bankruptcy is a legal process that allows you to eliminate or restructure your debts under the protection of the court.

In Tacoma and Pierce County, Washington, bankruptcy laws are in place to protect you from creditors, including payday loan lenders. Whether you file for Chapter 7 or Chapter 13 bankruptcy, you might be able to discharge your payday loan debts or reorganize your finances so you can make the payments more manageable.

• Chapter 7 Bankruptcy: This is also known as liquidation bankruptcy. It allows you to discharge most of your unsecured debts, including payday loans, meaning you will no longer be responsible for paying them.
• Chapter 13 Bankruptcy: This involves a repayment plan that lets you repay your debts over three to five years. While payday loans may not be fully discharged, they can be included in your repayment plan, which can reduce your overall financial burden.

Payday loans in Washington are regulated by the Washington State Department of Financial Institutions (DFI). They protect you from the predatory practices often associated with payday and Money Tree loans.

The Payday Loan Act (RCW 31.45) sets the following provisions:

• Loan Amount and Terms: These are capped at $700 with a maximum repayment term of 45 days.
• Interest Rates: Your lenders can charge up to $1 per $5 borrowed.
• Loan Limitations: Washington law limits the number of payday loans you can take out in 12 months (no more than eight).

This is all outlined in RCW 31.45.010.

• Lender Licensing: Payday lenders must be licensed by the state to ensure they are operating legally and following all consumer protection laws.
• Consumer Protection (15 U.S.C. § 1601): The Truth in Lending Act (TILA) is a federal law that requires payday lenders to provide clear disclosures outlining their loan terms, including the total amount of the loan, fees, APR, and repayment schedule.

The following is outlined under RCW 31.45.090.

• Debt Collection Restrictions: You are protected against aggressive or misleading collection practices.
• Legal Action for Nonpayment: If you default on your payday loan, the lender must file a lawsuit in court before any wage garnishment or other legal actions can take place.

RCW 31.45.210 protects military members and their families from payday loan abuse. Payday lenders can’t offer payday loans to active duty service members and their dependents if the loan would violate the Military Lending Act (MLA).

It is crucial to comprehend the laws governing payday and Money Tree loans in Tacoma, as this ensures you make more informed financial decisions.

While Washington State provides strong protections to prevent predatory lending practices, you still want to consult a skilled Tacoma bankruptcy attorney who can help you navigate these laws and determine the right course of action for your situation.

We can help you resolve your debt and safeguard your financial future.