Taking advantage of the poor
July 28, 2010 | 07:31 AM
My husband and I are both disabled and receive disability. We are really struggling to pay our rent and utilities. Our disability used to cover all of our expenses. We live very frugally. I am wheelchair bound and cannot work due to the constant pain I am in. My husband is able to work and has a part-time job. Our biggest problem right now is trying to pay off the payday loans we foolishly got ourselves into.
We were unable to pay our rent, due to an unexpected car repair, so I thought our only alternative would be a small loan. We do not have any family that could help us. It was only two loans for $500 each and I thought we would get them paid off quickly. I did not understand the confusing fine print because now I am paying 79 percent interest only payments and I have to keep rolling over the principle into the loan with additional fees. You would think this should be illegal. How do they expect someone like me, living on disability, to ever get rid of this debt? I found out that I can't even pay off the loans, I can only make payments. I can't believe we got ourselves into this mess. We have always been able to take care of ourselves and never asked for help before. Now we feel even poorer than before the loan.
Feeling Taken Advantage Of
Unfortunately, this is not the first time we have had to offer assistance to a fellow creation that got themselves involved with a payday loan. They are banned in many states, yet Wisconsin is the most unregulated state for these payday loan businesses. They prey on the working poor that barely live paycheck to paycheck. They often do not allow a payoff of the principle balance and charge interest rates as high as 500 percent. The fees alone make them an illogical choice for consumers. The only reason there are so many in our state is due to our government not enforcing stronger regulations on their abusive practice for years.
This has caused an even greater amount of people turning to social services and organizations such as The Time Is Now to Help, in order to survive. After they pay their loan payments there is not much money left for food and rent. If the state of Wisconsin really cared about its citizens, it would have enforced even stricter regulations than were recently adopted. Our federal government is plagued by thousands of lobbyists that sway government leaders away from what is good for the American people. Madison is also plagued by lobbyists for the payday loan business. They are working to keep what used to be illegal, called loan sharks or juice loans by organized crime, a legal thriving activity in Wisconsin. Why are payday loans banned in other states and thriving in Wisconsin?
I once assisted an 86-year-old elderly widow who got a payday loan for $500 and paid 176 percent interest. After two years of payments she still owed $780 more than the original loan. They would not allow her to pay off the loan until I stepped in. The elderly widow was traumatized by the bullying used by the payday loan personnel. She was crying constantly due to the financial and psychological stress. Our government representatives need to take a stand like other states and either place stricter regulations on or ban the payday loan business in our state. Paying interest rates up to 500 percent in some instances is morally wrong, being unable to pay off a loan balance is wrong.
This husband and wife were a perfect example of how these loans work. They had unexpected expenses that were not in their budget. This caused a great amount of stress and worry over impending homelessness. Payday loans prey on our fellow Americans in desperation. Two local payday loan businesses were happy to loan them the money needed. The couple thought they could pay these loans off in several months by being extra frugal. They were in for a shock when after a few months they realized all of their payments were only going to pay the interest. They now owed even more than the original loan amount. When the loan balance was due they had to roll this over into a new loan and incurred more fees and a higher interest rate. It is nearly impossible to break the cycle.
When I visited, the husband let me in their small apartment. There were not many belongings but the place was neat and clean. The wife had rheumatoid arthritis since she was a child and had gotten progressively worse over the years. She was in pain, very underweight, and had fevers quite often. The husband had been in a car accident and has difficulties walking and standing for long periods. He was only able to work about 4 hours a day, so this left them relying on their disability and every penny to survive. The husband needed their old car in order to get to his job, so the car repair to keep it running was what started the whole payday loan mess.
We sat at the small kitchen table to go over their finances. The wife told me how they met.
"We were two physically broken people, living in constant pain and loneliness. No one wanted to be with a constantly suffering person. Then we fell in love." I could see they lived on a budget where every dollar was needed to survive. Any unexpected expense would throw off their budget. The wife had to stop taking several medications due to their high loan expense. They ate all their meals at home with food from a food pantry when they received enough. Food stamps were a help. Often they did not receive enough food to see them through to the next month. I am sure this explained some of the wife's extreme thin frame. They said they did not have air-conditioning or turn on any unnecessary lights. They did not have a telephone, television, internet, a computer, or any other electrical device many of us take for granted. They lived extremely sparingly.
The wife had tears in her eyes as she explained how she fell victim to the payday loan scheme. She said, "I feel so stupid to have put ourselves in this position." I assured her there were many others in the same position, she was not stupid, just uninformed. The wife questioned, "How do they expect normal people to even understand all the fine print on these loans?" They indeed did have a lot of fine print, most of it written in terms or verbiage that a normal person would have a hard time deciphering. The government is selling out to these criminals, and many people are asking why.
The Time Is Now To Help assisted this couple with food, utilities, and rent for two months. With my persistence this enabled them to pay off their loans and get rid of that debt for good. They vowed to never get caught up in the payday loan scheme again. They really are good fellow Americans and I felt extreme compassion for them both as they struggle through life with disabilities and difficulties most of us will never have to deal with. I could see they truly loved and cared for each other. They truly wanted to live independently as long as possible. They thanked everyone at The Time Is Now To Help for helping to make that achievable and helping to free them from the terrible financial grasp held on them by the payday loans.
Please help. Please consider donating at this time as every dollar you donate will be matched by another, doubling your donation by the Richard Driehaus Matching Grant. Thank you for caring and sharing. Together we make a big difference helping our fellow creations of God.
Health & Happiness, God Bless Everyone, W.C.
Please Help: Make checks payable to: The Time Is Now To Help, P.O. Box 70, Pell Lake, WI 53157. The Time Is Now To Help is a federally recognized 501(c)3 charitable organization licensed in the states of Wisconsin and Illinois. You will receive a tax deductible, itemized thank you receipt showing exactly what every penny of your donation provided for the poverty stricken.
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