Nevada’s greatest court has ruled that payday lenders can’t sue borrowers whom simply take out and default on additional loans used to spend the balance off on a preliminary high-interest loan.
The Nevada Supreme Court ruled in a 6-1 opinion in December that high interest lenders can’t file civil lawsuits against borrowers who take out a second loan to pay off a defaulted initial, high-interest loan in quik payday loans Clarkson Kentucky a reversal from a state District Court decision.
Advocates stated the ruling is just a victory for low-income people and certainly will help alleviate problems with them from getting caught regarding the “debt treadmill,” where people remove extra loans to settle an loan that is initial are then caught in a period of financial obligation, that may frequently cause legal actions and in the end wage garnishment — a court mandated cut of wages planning to interest or principal payments on that loan.
“This is just a outcome that is really good consumers,” said Tennille Pereira, a customer litigation attorney aided by the Legal Aid Center of Southern Nevada. “It’s a very important factor to be from the financial obligation treadmill machine, it is one more thing become from the garnishment treadmill machine.”