St. Louis Bankruptcy Law Blog

St. Louis residents who are considering bankruptcy or looking for debt relief may be interested to know that a Missouri senator is pushing to alter the terms of payday loans.

A payday loan is an unsecured loan of $500 or less. Currently, under Missouri law, borrowers must pay off these loans in 31 days. In addition, if these loans are not paid off in 31 days, the borrower can perform a "rollover," which allows the lender to charge even more interest.

Fast, easy cash loans, such as payday loans, are often an attractive option to those in need of money in a time crunch. However, some of these loans with a quick turnaround have interest rates at an average of 390 to 450 percent. With interest rates this high, many people in the St. Louis area will take out additional loans to pay off their high-interest payday loans, and these risky financial decisions may leave many people considering bankruptcy.

By offering lower interest debt repayment options, some churches, lawyers, bankers and other nonprofit organizations in Missouri want to provide additional choices to residents who are considering bankruptcy or seeking debt relief.

Readers in St. Louis may remember the hugely popular movie "Jerry Macguire," which starred Tom Cruise as a charismatic sports agent whose catch phrase was, "Show me the money!" Sadly, the real-life Jerry Macguire -- the one on whom Cruise's character was based -- has fallen on hard times. A divorce, the death of his father, and the diagnosis of his two sons with a disease that leads to blindness likely all contributed to his fall from financial stability. After a series of business mishaps and several stays in rehab centers for alcoholism, the former sports agent recently filed for Chapter 7 bankruptcy protection. Now he hopes to get his life back on track.

Leigh Steinberg's filing for bankruptcy came after police were authorized to arrest him, but the warrant was never issued. Steinberg had not appeared at a court hearing regarding $1.4 million he is said to owe in back rent. The former agent's bankruptcy documents indicated that he has assets of $483,500, but the total of his debt is said to be over $3.1 million. The debt includes hundreds of thousands of dollars owed to people in the sports industry, $50,000 in credit card charges and $100,000 in taxes. At the time of Steinberg's Chapter 7 filing, his average monthly income exceeded his average monthly expenses by only $3.33.

In these tough economic times, many Missouri residents may find themselves struggling to meet all of their financial obligations. Whether it is due to unemployment or costly medical bills, too many people are facing financial hardship through no fault of their own. And that seems to be the case of mother from Springfield who recently sought an alternative way of providing her three young children with a merry Christmas.

The woman and her husband found themselves for the first time in financial trouble in 2010. They have a number of medical bills, in addition to considerable credit card debt. So far, they have managed to make ends meet, but they are finding it very difficult to get by.