Did you take out too many payday loans to meet your mid-month financial needs or to deal with a financial emergency? Payday loans are considered as one of the best financing options for borrowers who are in urgent need of immediate cash or for borrowers with poor or nonexistent credit. Although there are websites that are quick to promote the positive features of such short-term loans, failure to repay them can do damage to your credit report and scores. Because of the high-interest rates of payday loans, some people fail to repay the balance on their next payday and the debt can begin to add up. If you are one among them, have you considered relieving yourself of the debt burden through bankruptcy?
A payday loan is usually viewed as credit card debt and therefore both possible to remove through both Chapter 7 bankruptcy and Chapter 13 bankruptcy. The principal concern that needs to be reviewed is the date on which you’ve taken out that loan. Similar to credit card debt, if you’ve received the loan within the last three months or 90 days, there may be a presumption of fraud or abuse by the Bankruptcy Court. When a debt is viewed as a fraudulent transaction, the debtor requires the entire amount owed to be repaid in full. If the total outstanding principal balance that you owe is significant, you may be required to wait for more than 90 days.
Getting the help of an attorney while filing bankruptcy to remove payday loan debt
It is undoubtedly true that the best payday loan debt help that you’ll get is from the attorney who is helping you file bankruptcy. You should cooperate with the debt attorney by fully explaining details of the total amount that you owe, the interest rates that you’re being charged and the fees that you’ve accumulated. The attorney will work with you to help you fill out the bankruptcy petition form that will list any payday loans as unsecured debt.
Keep this vital points in mind while filing bankruptcy:
- Don’t take out payday loans again in the weeks before you file bankruptcy for the same reason. If the court sees that you’re accumulating debt to defraud the court, the bankruptcy case may be thrown out.
- Ensure that your attorney doesn’t encourage you to take out a payday loan. Even though you can’t pay off the fees of the attorney, a payday loan in this situation could do more hard than good when applying for bankruptcy.
- If you file Chapter 13 bankruptcy for payday loans, this will be treated as any other unsecured debt, and you will need to reward the lender with as much amount as you would have given to your lender through Chapter 7 bankruptcy.
- Inform your bankruptcy attorney of ALL details related to your filing bankruptcy.
When you feel overburdened with payday loan debt, you have the option to file bankruptcy and relieve your financial woes.