Don't Let a Payday Cash Loan Lead to Bankruptcy
That this subject which we will talk about a very important topic because it will promote your Read this issue
Here's how it works: You apply for a payday cash loan. You provide a postdated check for the amount you borrow plus the fee. Then on your next payday, the loan company cashes your check.
But what happens if you suddenly realize you need more money? Let's say you need to extend the loan repayment to the following payday. Or maybe you need an additional small loan just to tide you over. Now you will be paying even more fees. And the longer you extend the payday cash loan or add to it, the more fees you will accrue.
The Risk You Take with a Payday Cash Loan
Even though some states have caps on the fees that payday lenders can require, you run the risk of getting into a never-ending spiral of borrowing over and over again when you get started with payday loans. Eventually, you could wind up bankrupt.
According to the U.S. Federal Court system there are generally two types of bankruptcy that individuals use. The first, Chapter 7 is sometimes called liquidation. In this case, the court appoints a trustee to administer the bankruptcy and liquidate your non-exempt assets - those that can be seized by the court and used to pay off your debts.
You are allowed to retain certain personal belongings - household goods and clothing. Though often not, you may be able to retain your car and your home depending on your situation. Ultimately, at the end of the Chapter 7 bankruptcy (four to six months), most of your debts will be discharged.
The other form of bankruptcy that is available to individuals is Chapter 13. In this case a debt repayment plan is developed in order to repay your secured creditors and sometimes your unsecured creditors.
A secured creditor is one that has a lien on property such as a home, car, boat or other large-ticket item. An unsecured creditor doesn't have any security interests in the assets of the borrower. Payday lenders are unsecured creditors.
However, whether a payday loan is discharged in a bankruptcy filing will depend on whether or not the loan company and/or judge object to the inclusion of the loan.
You Could Still Lose Money to the Lender
Don't forget that your loan is backed by a personal check. Therefore, when you file bankruptcy the lender may try to recover their money by immediately cashing your check. Though the court can demand that the funds be returned, you have to be prepared for this action by ensuring that you have sufficient funds to cover the payment.
Keep in mind, too, that if you received the payday loan within the last 30 to 60 days, the lender may contest their inclusion among your debts on the basis that you were planning the bankruptcy when the debt was accrued. Whether or not the bankruptcy judge sides with you or the lender will be up to him or her, but you should be prepared to repay the loan on your own.
http://www.paydayloanconsolidators.com
Contact Us Today and see if our service can work for you to save you money in getting out of the payday loan trap.
Article Source: http://EzineArticles.com/?expert=Deborah_S._Hildebrand
Article Source: http://EzineArticles.com/6452262
That this subject which we will talk about a very important topic because it will promote your Read this issue
Here's how it works: You apply for a payday cash loan. You provide a postdated check for the amount you borrow plus the fee. Then on your next payday, the loan company cashes your check.
But what happens if you suddenly realize you need more money? Let's say you need to extend the loan repayment to the following payday. Or maybe you need an additional small loan just to tide you over. Now you will be paying even more fees. And the longer you extend the payday cash loan or add to it, the more fees you will accrue.
The Risk You Take with a Payday Cash Loan
Even though some states have caps on the fees that payday lenders can require, you run the risk of getting into a never-ending spiral of borrowing over and over again when you get started with payday loans. Eventually, you could wind up bankrupt.
According to the U.S. Federal Court system there are generally two types of bankruptcy that individuals use. The first, Chapter 7 is sometimes called liquidation. In this case, the court appoints a trustee to administer the bankruptcy and liquidate your non-exempt assets - those that can be seized by the court and used to pay off your debts.
You are allowed to retain certain personal belongings - household goods and clothing. Though often not, you may be able to retain your car and your home depending on your situation. Ultimately, at the end of the Chapter 7 bankruptcy (four to six months), most of your debts will be discharged.
The other form of bankruptcy that is available to individuals is Chapter 13. In this case a debt repayment plan is developed in order to repay your secured creditors and sometimes your unsecured creditors.
A secured creditor is one that has a lien on property such as a home, car, boat or other large-ticket item. An unsecured creditor doesn't have any security interests in the assets of the borrower. Payday lenders are unsecured creditors.
However, whether a payday loan is discharged in a bankruptcy filing will depend on whether or not the loan company and/or judge object to the inclusion of the loan.
You Could Still Lose Money to the Lender
Don't forget that your loan is backed by a personal check. Therefore, when you file bankruptcy the lender may try to recover their money by immediately cashing your check. Though the court can demand that the funds be returned, you have to be prepared for this action by ensuring that you have sufficient funds to cover the payment.
Keep in mind, too, that if you received the payday loan within the last 30 to 60 days, the lender may contest their inclusion among your debts on the basis that you were planning the bankruptcy when the debt was accrued. Whether or not the bankruptcy judge sides with you or the lender will be up to him or her, but you should be prepared to repay the loan on your own.
http://www.paydayloanconsolidators.com
Contact Us Today and see if our service can work for you to save you money in getting out of the payday loan trap.
Article Source: http://EzineArticles.com/?expert=Deborah_S._Hildebrand
Article Source: http://EzineArticles.com/6452262
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