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unsecured payday loan

Supreme Court guidelines Nevada payday loan providers can not sue borrowers on 2nd loans

Nevada’s greatest court has ruled that payday lenders can’t sue borrowers whom simply simply take down and default on secondary loans utilized to spend from the balance 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 a reversal from a state District Court decision.

Advocates stated the ruling is a victory for low-income people and can help alleviate problems with them from getting trapped in the “debt treadmill machine,” where people sign up for extra loans to settle a short loan but are then caught in a period of financial obligation, that may frequently result in legal actions and in the end wage garnishment — a court mandated cut of wages planning to interest or major payments on financing.

“This is an outcome that is really good consumers,” said Tennille Pereira, a customer litigation lawyer aided by the Legal Aid Center of Southern Nevada. “It’s a very important factor to be in the financial obligation treadmill machine, it is yet another thing become from the garnishment treadmill machine.”

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