Payday Loan Blog - Chapter 7 Bankruptcy and Payday Loans
Tuesday, January 08, 2008
Chapter 7 Bankruptcy and Payday Loans
You may have done the best you can on your financial record, but sometimes bankruptcy is just
a fact of life. If you have run into trouble then you may have run out of options. There is also a
chance that you have gotten a payday loan for some quick financial relief. Can this payday loan
be included in Chapter 7 bankruptcy? This is a question many people have asked.
Your Bankruptcy
Payday loans are often times very hard to pay off. This really only makes things worse.
Sometimes you will sign a contract with a payday loan company that says you cannot include
this debt in any bankruptcy you may have. But you should know that this is a clause that cannot
actually be enforced by a payday loan company. The truth is that this cause is close to illegal.
This is why you need to make sure you undertake any bankruptcy with a highly skilled lawyer.
Experienced lawyer will know that you can, in fact, include payday loans in your bankruptcy.
Payday loan companies put that clause in a contract because they really want you to pay back
in a timely manner. This is the way that they make their money. So know that you are able to put
your payday loan on a bankruptcy, but only look into bankruptcy if it is your last option.
| This information is provided by Payday Loan Affiliate on Tuesday January 08, 2008 Note: Legal Alternatives is not a member of Payday Loan Affiliate. |
Note: DebtSolutionsCorp.com is not a member of WikiAnswers.com
Question: If you file bankruptcy can you include payday loans?
Answer: Here's the thing - Loans made within a short period (say a year or two, but certainly 90
days) of Bankruptcy generally aren't included, as they are considered taken in anticipation of BK,
so you won't get relief.
Payday loans are written in such a way that they actually renew every 30 days or so...and are
entirely new loans...getting entirely new fee's etc. Hence they really can't be discharged in BK.
However, a number of Judges/Courts, because of the abusive nature of Payday loans (and bad
press...actions to control them), are simply looking through that and allowing them based on the
"original" date that started the daisy chain of loans. It just sort of depends on your
presentation....and the specific court your in.
Even where a judge does allow it...the loan company can and will protest...they do have a good
firm legal case....but hopefully you can at least negotiate the amount you owe to a more
reasonable amount and eliminate the fees, which are what make these things grow so fast.
This information is from: