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
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.
Chapter 13
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
