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Streamlining Your Bankruptcy

I knew that I had hit rock bottom financially when I started making credit card payments with other credit cards. Before I knew it, collectors were contacting me almost hourly, and it started to get really frustrating. I knew that I had to turn things around, which is why I decided to meet with a bankruptcy attorney. My lawyer took the time to listen to my troubles and walk me through the bankruptcy process. He made everything seem much more manageable, which really helped me out. This blog is here to educate other people about how much the right bankruptcy lawyer can help.

Do You Have To Pay Up? Understanding Payday Loans And Bankruptcy

It can happen to almost anyone; a car repair, a medical bill, or an emergency flight to see a relative. These things all cost money, and not everyone has funds set aside to pay for these sudden needs. A payday loan could allow you to take care of your problem when you don't have any other option. These loans can offer quick and easy financial help, but they should only be used as a last resort. The problem is that if your financial situation continues to worsen, you may need to file for bankruptcy. Can you include that payday loan debt in with your other debts when declaring a chapter 7 bankruptcy? Read on to learn more about what might happen if you are considering declaring bankruptcy and still owe for a payday loan.

What type of debts do you have?

When it comes to bankruptcy, there are two basic types of debt: secured and unsecured. The distinction is important to understand since all secured debt has the potential only to be forgiven with the forfeiture of property, such as a home or a car.

Secure debt: This type of debt is always "attached" to a piece of property. It might be actual collateral, or it might be automatically secured by the loan itself. Most people own a car, and they may have an auto loan on that car. If you fail to make payments as agreed, it may be repossessed by the lender. With a bankruptcy, it may also be seized under certain circumstances, whether you are behind on your payments or not. Another common example of a secured debt is your home. If you have a mortgage, that is considered a secured debt.

Unsecured Debt: If there is no property attached to a debt, is it considered unsecured. Most credit card debt and personal (or signature) loans are unsecured. Most people have a healthy amount of credit card debt, so getting rid of that unsecured debt can be a primary reason for declaring a chapter7 bankruptcy. No property is at risk; you simply watch your credit card debt go away once you file paperwork. You should know that payday loans are undeniably unsecured debt and they can be included in your chapter 7 bankruptcy without fear of any property loss.

What About that Paper I Signed? With most payday loans, you will be signing a great deal of documents. One of those is very likely a bankruptcy disclosure. With this document, you agree to continue making payments on your payday loan even if you declare bankruptcy. Should you be worried about this disclosure? No, this document is an attempt to convince and intimidate less informed consumers into paying money even with a bankruptcy. Whatever you do, do not leave that payday loan off of your bankruptcy or it will continue to haunt you for some time. Speak with an attorney to learn more.