On February 25, 2024, TX-based consumer finance company, Cottonwood Financial Ltd. (d/b/a Cash Store), and four affiliates (collectively, the “debtors”) filed chapter 11 bankruptcy cases in the Northern District of Texas (Judge Everett). The debtors own brick-and-mortar locations in Texas, Idaho and Wisconsin where retail consumers are able to obtain short-term loans (“payday loan alternative”) in one of three forms:
Single Payment Cash Advances = small unsecured short-term loans up to $3k with a single repayment date.
Installment Cash Advances = similar structure as above but repaid with a fixed number of periodic equal-sized payments.
Title Loans = small secured short-term auto equity cash loans of up to $25k.
The pandemic did a job on this business.
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