You may want to file a petition for bankruptcy in the first place as an attempt to relieve yourself from certain financial burdens. With this, one debt you may be interested in releasing is your payday loans. Read on to discover whether you can eliminate payday loans through bankruptcy and how a seasoned Rockland County bankruptcy attorney at The Law Offices of Allen A. Kolber, Esq. can help you in doing so.
By definition, what is a payday loan?
Simply put, a payday loan is a type of short-term, low-dollar, and high-cost loan that an individual may owe back on their next payday. An individual may consider taking out this type of loan to pay off their monthly bills. However, doing so is a less-than-ideal option. This is why many payday loans are illegal in New York State, along with the fact that there is a 25 percent interest rate cap on small loans within this state. The following lists some of the negatives that come with a payday loan:
- An individual may find it challenging to pay back the debt of a payday loan while simultaneously paying off their regular bills.
- A payday lender may take an automatic payment from an individual’s bank account, which may flag insufficient funds in the account and prompt additional bank fees.
- A payday lender may roll the remainder of an individual’s payday loan into a new loan, which may prompt additional fees.
Is it possible to eliminate payday loans through bankruptcy?
Understandably so, you may have figured that a payday loan was a quick solution to your immediate financial issues. But unfortunately, you may find yourself in an even greater amount of debt afterward. You may rest assured knowing that your payday loans may be declared in your bankruptcy. More specifically, they may be fully discharged in a Chapter 7 bankruptcy filing and partially discharged in a Chapter 13 bankruptcy filing.
In regards to a Chapter 13 bankruptcy filing, your payday loans may be considered the same as your other unsecured loans. Therefore, they may be included in your established repayment plan so that you may pay them off within three to five years. What’s more, you may even be able to discharge these payday loans altogether via a hardship provision. In other words, you may argue that paying off this debt would put you under a greater amount of financial distress, due to your recent unemployment or any other negative financial circumstances.
If a bankruptcy petition is something you wish to kickstart today, then you must retain the services of a competent Rockland County bankruptcy attorney from The Law Offices of Allen A. Kolber, Esq. We await sitting down with you at your free initial consultation.