Many people considering bankruptcy have payday loan debt. It is no secret that cash advances, payday advances and payday loans can drive customers deep into debt. With exorbitant interest rates and fees these creditors hope that clients won’t pay on time. Once their loans enter collections payday loan companies will hire aggressive debt collectors who call night and day. Fortunately, individuals with payday loan debt can turn to chapter 7 bankruptcy. In chapter 7 bankruptcy old payday loans can be eliminated. If you have payday loans call our bankruptcy lawyer today at (916) 596-1018.
They Know You Will File Bankruptcy
In truth, payday loan agencies know that a certain number of clients will file bankruptcy rendering collection impossible. Nevertheless, the profits received from making these high-risk loans make up for the loss incurred when clients file chapter 7 bankruptcy. Therefore, you should not feel guilty about filing chapter 7 bankruptcy to eliminate payday loan debt.
Payday Loans Are Unsecured
Chapter 7 bankruptcy eliminates many forms of unsecured debt including payday loans. When we say unsecured debt we are referring to debt in which the creditor does not hold a security interest in collateral like a car lender has in a financed vehicle or a mortgage company in a home. As an unsecured creditor, your payday loan company cannot take a specific item of property and sell it to repay your debt without first obtaining a judgment. Therefore, old payday loans are easily discharged in bankruptcy.
One problem in bankruptcy that occurs quite frequently comes with recently incurred payday loans. If you are considering bankruptcy you should stop incurring debt; stop using credit cards and stop taking out payday loans. If you incur debt knowing it will get discharged in bankruptcy your creditor may be able to except your debt from discharge on the grounds that you fraudulently incurred the debt. Moreover, payday loans taken our recently before filing bankruptcy are presumed to have been fraudulently incurred. Therefore, if you have payday loans speak with a bankruptcy attorney right away.