But eventually Clarissa couldn’t repay a loan, and the payday company deposited the check they were holding as collateral
Clarissa Farrar and her 15-year-old son put in more sweat equity hours than required on their Habitat for Humanity house, in joyful anticipation of living in their own home. Clarissa works full time, but receives no child support and struggles to manage her expenses. At times she has worked a second part-time job, but when the company she worked for shut down, Clarissa thought payday loans might ease her way. The check bounced and both her bank and the payday lender charged her additional fees for insufficient funds. Now Clarissa’s hopes for a Habitat house are dimmed.
At the most trying time during her experience with payday lending, Wanda Thompson* of Florida owed nine different payday lenders
Kym Johnson, a single mother working as a temp in the Triangle area, took out a payday loan when a friend told her about how she could borrow money until her next payday. She quickly fell into the debt trap, and had to pay a high fee every payday to renew the loan and avoid default. She paid on both loans for about a year, finally convincing one of the lenders to let her pay off the loan in increments. It took Kym another eight months to shake free from the debt trap.
Every payday, she spent her lunch hour shuffling between lenders to pay fees and keep herself afloat. She quickly fell behind on her car payment and other basic expenses while trying to avoid defaulting on the payday loans. One of the lenders threatened to revoke Wanda’s driver’s license when she could no longer make payments. Wanda finally sought legal advice and pulled herself out of debt, but not until she had stopped payment on some checks and paid bounced check fees on others.
As a grad student in North Carolina’s Triangle area, Allen King* found it very difficult to pay off the four payday loans he had accumulated, since the lenders did not offer installment plans. When he did manage to pay off one or two of the loans, he soon found himself strapped for cash and forced to renew the loan.
When she had trouble keeping up this cycle, she took out a second loan to pay fees on the first
Allen finally sought help from a credit counselor. He sent letters to the payday lenders asking for a payment plan he could afford. But instead of helping him work out payments, one of the lenders deposited his check upon receiving his letter, and it bounced twice before he could cancel the check. Two other lenders were internet-based companies who automatically drafted his checking account. He had to close his account to stop them. When one of these lenders received Allen’s payment plan letter, they called and threatened to send a sheriff to his 
house and serve him court papers. Allen now realizes he has technically repaid the debt several times over in rollover fees.
Rhonda Keller* and her two daughters experienced a financial crisis last summer that sent Rhonda looking for help from payday lenders. She found not the help she needed, but disaster. Rhonda fell into the payday lending debt trap — the terms of the loans she took out required her to either pay them off in less than two weeks or have $90 fees automatically debited from her bank account repeatedly. Those loans, at triple-digit APR, have cost her much more than the exorbitant fees. Her family’s finances are in ruins and she is planning to file bankruptcy.