The vicious debt trap of payday loans
A Kansas City company that financed payday loan operators has declared bankruptcy while holding $120 million worth of claims and judgments that it has been unable to collect.
NorthRock LLC listed among its assets a $29 million claim against Johnson County businessman Joel Tucker and others.
Tucker was ordered last year to pay $4 million in a payday loan case. He had been accused by the Federal Trade Commission of falsifying payday loan debts and selling them to bill collectors. The collectors then targeted consumers who sometimes paid off the fake loans just to stop the calls. He is the brother of payday lender Scott Tucker, who was sentenced to more than 18 years in prison.
NorthRock listed among its assets a $35 million judgment against Eldridge Marketing LLC stemming from a lawsuit in Missouri courts. It also has large judgments against three other defendants in that case, each of which had entered bankruptcy previously.
Those other defendants — Del Hodges Kimball, Sam S. Furseth and the payday loan business LTS Management Services they owned — each face judgments of nearly $18 million in NorthRock's favor.
The total — $120.4 million — far outpaces the $35.83 million NorthRock listed as its obligations to others.
Among those NorthRock owes money is one of its owners. Melvin L. Dunsworth Jr., who is listed in the filing with addresses in Monmouth, Oregon, and Dallas, is owed more than $11.5 million from his loans to NorthRock, according to the bankruptcy filing.
Dunsworth and co-owner David Harbour, of Helena, Montana, are listed as co-debtors with NorthRock on some of its obligations.