I Think I Really Screwed Up Taking Out Indian Tribal Payday Loans


Dear Steve,

Hello, I have messed up myself! I have taken out several tribal loans, and the payments are killing me.

How can I pay these off for as little as possible? Do I need to file for bankruptcy?



Dear Kaylee,

Tribal loans have been a real pain in the ass for states and regulators. What started as a way to get around state regulations turned into a mess of unenforceable loans.

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Before you rush to file for bankruptcy, which is a good option for dealing with these loans, I would suggest a different approach.

Do a web search and find out how to contact your State Attorney General. File an online complaint with them regarding the loans.

Ask the Attorney General if the tribal lenders were authorized to extend loans in your state because you have some tribal loans. You could also file a complaint with the Banking Commissioner in your state.

One attorney had this to say about these types of loans, “In the past few years, states have successfully sued these lenders for injunctions against these predatory loans. Contrary to their claims, tribal loans do have to follow state law. The take-away is this: while these lenders may not be able to be sued for money, they still have to comply with state lending regulations.”

He said, “Most consumers who take on tribal loans fall behind on them. This is by design: hardly anyone who takes on loans with such high rates can afford to pay them back. Frequently these loans get sent off to debt collectors. Since the debt is illegal in the first place, the debt is tough to enforce. Furthermore, if the debt collector attempts to collect on these loans, it will likely violate the Fair Debt Collection Practices Act entitling the consumer to money.”

Please file the complaints as I suggested and wait to hear back from your State regulators before you rush to do anything.

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Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.
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