Payday loans are designed to help you pay your bills until your next paycheck. While these loans can be helpful in the short-term, they come with high interest rates and strings attached. The truth is most people get caught up in a never ending cycle of borrowing, the debt and interest add up, and they are unable to pay the loan back.
The good news is payday loans are considered unsecured debt. Unsecured debt is generally discharged in bankruptcy proceedings. Even if payday lenders include a disclaimer in their paperwork that states that the loan is not dischargeable in bankruptcy, payday loans are fully dischargeable.
Your attorney can better describe the benefits of Chapter 7 and Chapter 13 bankruptcy and which one is right for you. Below is a brief summary of the differences.
Chapter 7 bankruptcy allows you to discharge debts without repayment. Almost all unsecured debt is dischargeable. Your payday loan is likely to be discharged, since it is not secured and is not a priority debt.
In a Chapter 13 bankruptcy, you repay certain debts using a repayment plan over time. Payday loans are not paid back for most people in a Chapter 13. They are simply discharged.
It is important for anyone filing for bankruptcy to know their rights and the additional benefits of Chapter 7 and Chapter 13 bankruptcy. Contact King and King today for a free consultation at 404-524-6400. We will be happy to answer any questions about payday loans and bankruptcy and will help you get financially back on your feet again. www.kingandkingattorneys.com