Payday loans are a popular option for those who need quick cash to get out of a bind. However, for those filing for Chapter 7 bankruptcy, Payday loans can sometimes complicate things. It's important to fully understand how Payday loans will impact your filing before you proceed.

The Craig Black Law Firm works with bankruptcy filers who have Payday loans and knows the challenges they bring. If you're considering filing for Chapter 7, reach out to me at 678-888-1778 or complete my confidential contact form.

Payday Loans and Chapter 7

In bankruptcy, secured debts are separated from unsecured debts. With secured debts, the loan is secured by collateral, while unsecured debts aren't. Even though payday lenders often secure the debt using bank withdrawal authorizations, payday loans are considered unsecured.

Bank withdrawals are where things get complicated, though. Some lenders may attempt to collect on the loan even with a stop order in place, at which point you can file a motion with the court to address the matter.

Payday Loans and Fraud Accusations

Since Payday loans typically have short turnaround times, having one outstanding can look suspicious. If you took out the loan within weeks of filing, it could appear to the court that you deliberately borrowed the money, knowing you wouldn't have to pay it back.

The court won't be the only one raising the fraud alarm. When the stop order is issued, Payday lenders are put on notice not to try to collect the outstanding debt. The lender can object to this stop order and look for reasons to demonstrate the funds were taken fraudulently.

Payday Loans and the Chapter 7 Discharge

Along with other unsecured debts, your Payday loan will be discharged once the court has reviewed your filing and given its stamp of approval. As long as the Payday lender doesn't object or the lender's objection is overruled, you won't be responsible for paying back the loan.

Since Payday loans aren't attached to any assets, you also won't have to worry about anything being seized to offset the lender's loss. You'll simply walk away from the debt so that you can start fresh.

The Craig Black Law Firm and Chapter 7

Payday loans can be a handy way to get money in a pinch, but with their high interest rates, they tend to make a bad situation worse. While Chapter 7 bankruptcy can erase that debt, it's important to avoid taking a Payday loan in the months leading up to filing to avoid a fraud claim.

The Craig Black Law Firm knows the unique challenges that come with Payday loans and can help you figure out where your loan will stand after your filing. I tackle each case personally and can help you work through all the questions you have. Give me a call at 678-888-1778 or fill out my contact form, and I'll be in touch.