Many times, people that struggle to pay their bills turn to payday loans (also known as cash or check advances and short-term loans) to keep up with their financial obligations. These lenders typically have ridiculous interest rates; predatory lending practices; and, trap people in a cycle of dependency for the instant cash that is available. The good news is that, as a general rule, payday loans are considered unsecured debt that may be discharged through Chapter 7 Bankruptcy and Chapter 13 Bankruptcy. A Chapter 7 Bankruptcy will allow you to completely eliminate payday loans while a Chapter 13 Bankruptcy is a structured payment plan that will allow you to pay as little as pennies on the dollar of the payday loans through the Chapter 13 Bankruptcy Plan (the remainder of the payday loans are eliminated).
It’s important to know that these lenders may challenge the Bankruptcy discharge if the payday loans were taken out within 70-90 days of the Bankruptcy filing. The Court presumes bad faith and will issue its ruling based on whether it believes there was a fraudulent intent to defraud the lender. As previously stated, many people get caught in a long-term cycle of taking advances to pay prior payday advances and finance charges along with continuing to depend on them as a source of income. Because of this cycle, Courts often find that there is no fraudulent intent and that the payday loan is a single debt that dates back much further than the most recent pay advance. It’s important to contact an experienced bankruptcy attorney at JRQ & Associates if you are caught in this never-ending cycle of dependency and want to reclaim your life. At your free bankruptcy consultation, we will review your situation carefully and advise you of the best course of action to eliminate payday loans.
There are peculiar issues that arise with payday lenders that can cause headaches. One of these issues is when a post-dated check has been provided to the lender in exchange for the advance. The lender may try to cash the check after the bankruptcy is filed; a possible violation of the automatic stay. The solution to this problem might be as easy as closing your bank account or putting a stop on the check, but you need to discuss your options with an experienced bankruptcy lawyer. It’s important to note that the lender might also violate the FDCPA if it threatens criminal charges for writing a bad check. There are many other issues that may arise with these types of lenders, so you should schedule a free bankruptcy consultation with an experienced bankruptcy attorney at JRQ & Associates to discuss the best course of action to eliminate payday loans. Call today to set up an appointment.