Usury and a Chapter 13 Bankruptcy in Hartford Connecticut

Usury is Latin for “interest on a loan”. Today the term usury refers to the interest charged above the rate allowed by law. It is generally considered charging an unreasonable or high rate of interest. Each state has its own usury laws establishing the interest rate that is considered reasonable and unreasonable.

For example, in the state of Connecticut, 12% is the usury rate that has been established for personal or consumer loans. Interest is not permitted to be charged in all civil suits. However, in the cases in which it is permissible, post judgment interest is allowed at the rate of 10%. 

Connecticut courts follow generally accepted practice when it comes to cases involving personal loans with interest rates in excess of what is permitted by law. In such instances, a court in Connecticut can strike down a loan agreement with an interest rate in excess of the law claiming it is unenforceable and illegal. This action by the court relieves the borrower from any further obligation under the terms and conditions of the loan. 

Due to the deregulation of the credit industry, it is too easy for the average American to get in debt. Over 1.5 million personal bankruptcies were filed in the United States last year, almost a 300% increase from those filed in 2006. What amounted to usury interest rate in the past seems to be common practice within the credit industry today. 

In 1980, the Federal Government passed a special law which allowed national banks to ignore state usury limits and peg the rate of interest at a certain number of points above the Federal Reserve discount rate. In addition, specially chartered organizations like small loan companies and installment plan sellers have their own rules. 

The laws in most states may not be enough to regulate credit card rates, and debtors, who have been the victim of aggressive credit card marketing and high interest rates, may need to seek bankruptcy protection. If you qualify and are inclined to pay the debts you owe, filing Chapter 13 Bankruptcy remains one of the most promising forms of relief. 

Should you file for bankruptcy protection if you have exorbitant credit card debt? Talk to a bankruptcy lawyer and let them review your financial situation. 

If you need relief from the stress of debt and you live in or around the metropolitan area of Hartford, Connecticut, contact us at .We will help you find a bankruptcy attorney in your area who will answer your bankruptcy questions.

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