Hello, this is Jeff Kelly and today I want to be talking about Title Pawns and the Title of this video is “Title Pawns are a Financial Mess”. Now you may be saying to yourself, what? Come on that’s a little extreme isn’t it?
No, it’s really not. There’s a reason that title pawn loans are illegal in 30 states, let that sink in…
Illegal in over 30 states. Very very very dangerous.
Okay, the American centers for Addiction states that meth is the most damaging addicting drugs a person can take similarly taking a title pawn loan on your car extremely dangerous to your financial health. Compound interest is a great thing when it is working in your favor. It’s made Warren Buffet one of the richest man in the world. Warren Buffet states “My wealth come from a combination of living in America, some good genes and compound interest. Compound interest is great when it works in your favor.”
But what does it look like when compound interest is working against you? It looks like a title pawn loan, that’s what it looks like. Here’s how title pawn loans work (most of them):
Let’s say you have a car worth $5,000 and it’s completely paid off. Typically, I see people come in with loans around thousand dollars on this car, Title pawn loan. Well, if you missed your payment and you don’t comply with all the terms and that title pawn loan expires, the title of your vehicle transfers automatically, it doesn’t matter if you are still driving the car, they own your car! That’s a terrible predicament to be in.
The Georgia Department of Law Consumer Protection Division states that the interest rate that a title pawn loan Company is allowed to charge you as capped by law in 25% per month(that’s 300% annually) for the first 3 months and 12.5% per month after that, 150% annually. This means that combined maximum yearly interest rate of 187.5% when the balance owed on the title pawn is not paid (again, I want to emphasize that the title automatically transfers.).
So, what do you do when you are tempted to go take out a title pawn loan? I think you really need to look at your entire financial situation. Is it really a short-term thing or is it something bigger? It doesn’t cost anything to come in and meet with us take advantage of a free consolation and let us look at the entire picture of your situation.
Now, what if you already have taken out title pawn loan? Why is it that bankruptcy attorneys hate title pawn loans so badly? Well, here’s why…
There was a ruling in a case, Enray Jonathan Normington where the ruling basically states that Chapter 13 doesn’t save you from title pawn. Here’s what I mean by that, in the past, before this ruling we would take the whole balance owed on the title pawn loan and spread it out to 45 years. Well, per this ruling you got 60 days from the date your case is filled, to get that balance paid off. And that could be extremely problematic for large loan balances. You know, sometimes the title pawn company might go along with it. We’ll wont know they file a case, it’s Iffy, that’s why we don’t like title pawn loans.
If you have any questions at all don’t hesitate to give me a call 770 881 8449. We have office locations in Marrieta, Kennesaw, Douglasville, Dalton, Rome, Cartersville and Dallas Georgia. And I would also encourage you to checkout my website www.kellycanhelp.com we’ve got a search box there, you can search for various topics about bankruptcy that we written about and if you’d like to take advantage of free consultation give me a call and I look forward to meeting you soon. Thank you!