There is a bill before the Senate judiciary committee that would make it harder to collect on high risk loans, among them are payday loans.
The bill would limit creditors from collecting on high-interest rate loans in bankruptcy court and may give consumers leverage to negotiate better terms.
I don’t think this is a bad thing for a couple of reasons:
- Payday lenders rarely get anything back in bankruptcy court anyway.
- When a charge-off occurs, settling is the best course of action anyway, so long as its reasonable.
Let’s face it, there are a lot of loans that never get paid, expecially on the Internet.
You can read more about this article in Bloomberg.