If I have gotten into a payday loan mess, what are my options?

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If I have gotten into a payday loan mess, what are my options?

I am a disabled senior and have gotten myself into 6 payday loans that I can’t keep up with. All the loans are from American Indian tribes. I just found out the loans are prohibited in NJ. I have closed my bank account. What is my liability and what should I do next?

Asked on September 8, 2011 under Bankruptcy Law, New Jersey


FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 12 years ago | Contributor

If the loans that you made with a native American Indian tribe are prohibited in your state (New Jersey), are the loans void (illegal as a whole) or are they voidable (you have the election to deem them invalid)?

If the loans are illegal in your state, why are they? Too high of an interest rate? In California, if a loan is deemed usurious (interest rate is too high per state law), the result is that the principle is to be paid back interest free. Perhpas New Jersey has similar case law as California regarding interest free pay back on the principle borrowed.

I suggest that you do the following:

1. if your county has a "legal aid" program, contact it for assistance;

2. contact your local bar association to see if it has a program to assist people like you, many counties have clinics to assist;

3. contact your state bar association and see if the State Bar of New Jersey can put you in touch with a group or an attorney to assist you with your problem;

4. contact any local law school near you to see if there is a program or clinic that is done through the laws school that can help you.

Good luck.


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