Have you ever taken out a payday loan? People often go in there thinking that it will be just a one-time thing, but it never is. If you haven’t taken out this loan before, don’t do it. If you have, you know how harsh their repayment terms are and that it is almost impossible to pay the loan off. Their interest rates are incredibly high and their collection strategy will take all of your money leaving nothing for your rent or food. It is a never-ending cycle. You can’t afford to pay off this week’s loan because you had to buy gas and pay the electric bill, so now you have to take out a second loan to cover the first. It just goes downhill from there.
Payday lenders will automatically deduct money from your bank account making it virtually impossible to live. Even when you don’t have the money in there, they are still going to hit the account, causing you to incur overdraft charges that make things even worse. Once you start to default on the loans, they will often start threatening you saying that they police are going to arrest you for basically writing a bad check.
What can you do? The answer is that you can stop them in their tracks through bankruptcy.
If you qualify, Chapter 7 and Chapter 13 bankruptcy can help you to deal with these predatory payday lenders. First, it will stop them from calling you, sending you collection letters and harassing you. Second, it will stop them from automatically deducting money from you account causing you to accumulate overdraft charges. You will likely need to close your current bank account and open a new one, however. Third, it will free up that money so that you can now pay for your utilities, rent, food and gas.
In a Chapter 7, you can discharge or completely wipe out these unsecured payday loans. You must qualify by having a certain threshold income and a close examination of your assets are needed before filing to make sure that they are protected. Most people do not have a problem with these issues, but you will want to meet with a professional bankruptcy attorney beforehand to make sure that you are safe.
Chapter 13 will allow you to propose a repayment plan for your payday creditors where you can repay your unsecured debts a percentage of what is owed to them. That percentage is based upon your income and your assets. If you have higher income or a higher amount of assets, you will pay a higher dividend to your creditors. If you have lower income and a lower amount of assets, you will pay a lower dividend out.
Please give me a call at 281-847-4345. I’ll be happy to sit down with you for a free, no obligation consultation to evaluate your situation and inform you of your different options on taking care of these payday loans through bankruptcy. You can also send me an email at firstname.lastname@example.org. I look forward to hearing from you soon.
Rod S. Kemsley
KEMSLEY LAW FIRM, P.L.L.C.
Attorneys & Counselors at Law
505 N. Sam Houston Parkway E., Suite 400
Houston, Texas 77060