Payday Loan Debt
Payday loans can be a very convenient way to get money in your pocket fast. Payday loans have never been easier to obtain, but there is a definite downside. The fees and interest on these loans can really add up and we often meet with people who have been struggling to pay these loans off over time and the fees, interest and penalties have made it nearly impossible to do so.
We met with someone recently who had a job with periods of many hours and some periods where there was little work dependent on environmental factors. He was using payday loans to subsidize the slow times, and would pay them off when work picked up. When we were discussing his challenges, it turns out he was paying hundreds of dollars in interest and penalties and was never able to get ahead. He was counting on months of sustained work to get out of this debt, but those months never came. We were able to file a consumer proposal and settle for approximately 30% of what he owed to all of his creditors, including the payday loan company.