Payday Loans Help in Michigan
We’ve all had expenses pop up unexpectedly. Whether your kid needs braces or your car needs repair, it can be tricky to scrape together the cash you need. If you’re one of the millions of American families living paycheck to paycheck, that little bump in the road can seem more like Mt. Everest.
When you need a little extra, you might consider taking out a payday loan to cover your surprise bills. While these loans might seem convenient, they are really just high-interest traps laid by predatory lenders.
If you have been trapped in a payday loan debt cycle, Michigan bankruptcy laws can help you find freedom again. Call or text DebtStoppers today at 313-880-3970 to schedule a free debt analysis with one of our experienced Michigan bankruptcy attorneys.
Payday Loan Laws in Michigan Explained
Payday loans are high-interest, low-dollar cash advances that can come at a much higher cost than you might expect. When you take out a paycheck loan, you write a post-dated check or authorize an electronic bank transfer for a later date. The lender gives you the total amount of money you borrowed on-the-spot— after their exorbitant fees and interest rates are taken out.
Michigan laws require borrowers to sign a written agreement detailing:
- Fees and the equivalent interest rate
- How to file a complaint against the lender
- How to cancel the loan for a refund of the service fee
- A statement advising the customer to only use the service for a short-term cash need
Understanding the Statute of Limitations and Regulations
According to Michigan laws, the statute of limitations for payday loans is 6 years. This means that if you can’t pay back what you owe, the lender has 6 years from the date of default or the date of last payment (whichever is later) to initiate a lawsuit. Michigan laws place some additional regulations on paycheck loans. These legal limitations include:
- Borrowing is restricted to $600 per loan, not including fees.
- A borrower is restricted to two outstanding advances at once throughout the state, and one advance per lender.
- Fees are limited to 15% on the first $100, 14%on the second $100, 13% on the third $100, 12% on the fourth $100, and 11% on the fifth and sixth $100.
Do You Need a Repayment Plan?
The interest rates for payday loans are almost always unreasonably high. Even though Michigan laws restrict fees, if you take out the maximum amount of $600, you can be charged $76. This charge is much higher than standard interest rates.
Although Michigan laws require payday lenders to offer repayment plans to customers who have taken out more than 7 payday loans in the last year, there are no laws requiring lenders to offer repayment plans to anyone else. Even if you manage to secure a repayment plan, you’ll still be trapped in all the other debts that drove you to a predatory lender in the first place.
Our Experienced Local Attorneys Can Help You
If every little bump in the road sends your finances into a tailspin, don’t rely on payday loans to survive. When you’re trapped in debt, bankruptcy laws can set you free. Call or text DebtStoppers today at 313-880-3970 to request a free consultation with one of our experienced Michigan debt relief lawyers.
When you can’t make ends meet from paycheck to paycheck, never turn to a predatory lender. Call or text DebtStoppers at 313-880-3970 instead!