When Irene’s husband passed away, she did not have enough resources to pay for his funeral. As a last resort, she and her disabled son went to a “payday loan” company to borrow $150 each. This gave them the money they needed to complete paying the funeral expenses.

Neither Irene nor her son could read. They felt they understood the terms of the loan, but did not fully appreciate the results. Each of the loans carried an interest rate of almost 425%. They both made their payments on time for a number of months, but soon discovered that everything they paid in was being applied to the interest. In total, for each $150 loan, they were obligated to repay over $975.00.

After six months, they reached out to Legal Aid. Their case was placed through the Volunteer Attorney Project with a private attorney who was willing to assist the clients.

After reviewing their applications and visiting with the Irene and her son, the volunteer attorney contacted the loan company and told them what they were doing “was outrageous.” He noted that the clients’ had no assets and no income beyond Social Security, which the loan company couldn’t touch. To his surprise and delight, the loan company quickly agreed to cancel their debts.

Within four months of contacting Legal Aid, the loan company converted both loans to a zero balance.

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