Can You File Bankruptcy on Payday Loans?

File for Bankruptcy Can You File Bankruptcy on Payday Loans?

Can You File Bankruptcy on Payday Loans?

If you're overwhelmed by a payday loan, you may be wondering, "Can you file bankruptcy on payday loans?" Fortunately, in most cases, you can. While bankruptcy has its downsides, in some cases it can be a good move that allows you to eliminate your debt and give you a financial fresh start.

DoNotPay can help you save time and stress if you decide to file for bankruptcy to eliminate your payday loans. Here's what you should know about filing for bankruptcy on payday loans.

What You Should Know About Payday Loans and Bankruptcy

If you're considering filing for bankruptcy, you probably want to confirm ahead of time that the specific type of loan you're struggling with can be discharged in bankruptcy.

What Is a Payday Loan?

Payday loans are short-term loans with very high-interest rates. While payday loans can be appealing as a way to get quick access to cash, the high-interest rates make it easy to get overwhelmed by the loan.

Can You Discharge a Payday Loan in Bankruptcy?

In most cases, you can discharge a payday loan in Chapter 7 bankruptcy. Filing for bankruptcy sets up an automatic stay that blocks your lender from coming after you for your loan balance immediately. This can give you a break from collections calls, which should stop permanently once you finish the process.

What Exceptions Should You Know About?

If you've taken out your payday loan within the last 90 days, you won't be able to get rid of it through bankruptcy. This is because bankruptcy law assumes that you've been considering bankruptcy for a few months before filing, so you would have known you were going to file for bankruptcy when you applied for the payday loan. This is considered fraud, so you can't file for bankruptcy until at least 91 days after you applied for your payday loan.

How to File for Bankruptcy on Your Own

Filing for bankruptcy can be a complicated process, but these are the basic steps you'll need to take if you file.

1. Get Your Documents Together

There are a number of documents you'll need to file for chapter 7 bankruptcy, including;

  • Your credit report
  • Two years of tax returns
  • Bank statements
  • Vehicle registration

2. Complete the Required Credit Counseling

You'll need to complete a one-hour credit counseling before filing. This session will help you confirm whether you really need to file for bankruptcy. There will be a fee for this course. There are two ways to complete it:

  1. Online
  2. By phone

When you complete your credit counseling, you'll receive a certificate. Make sure to keep a copy of this certificate, as you'll need it when you file.

There are two courses you have to take if you are in San Diego

Credit CounselingA course you must take and complete before the case is filed. You must take this 180-days before you file your bankruptcy
Debtor EducationCourse you have to take immediately after the case is filed.

All credit counseling and debtor education courses are handled by third-party agencies. You would have to spend a lot of time looking for the right one for you in your state. And they all cost extra.

3. Complete Required Forms

Make sure to allow plenty of time for this step, as filing for bankruptcy requires filling out more than 70 pages of forms detailing your financial situation.

4. File in Court

You'll need to go to your local courthouse and then go to the clerk's office to file. The court clerk will scan some of your documents, and you'll mail the others to your bankruptcy trustee.

5. Attend Creditor Meeting

After you've filed, you'll need to attend a 341 meeting, also called a meeting of creditors. This will usually be a short, straightforward meeting with your trustee. The trustee will confirm your identity and ask a few basic questions.

Filing for bankruptcy on your own is doable, but it can be an overwhelming and difficult process.

Easily File for Bankruptcy With DoNotPay

Filing for bankruptcy can be complex and time-consuming, and hiring an attorney to help can be expensive at a time when you're already struggling financially. DoNotPay's fast, easy and successful system supports you through filing for bankruptcy. Save yourself time and stress while making sure all of your forms are completed accurately.

How to file for bankruptcy using DoNotPay:

If you want to file for bankruptcy but don't know where to start, DoNotPay has you covered in 5 easy steps:

  1. Search for File for Bankruptcy on DoNotPay.

     

  2. Put together a list of your debts, expenses, and assets. If you need help accessing information like your credit report, DoNotPay can help you get your report.

     

  3. Let DoNotPay walk you through your bankruptcy options and help you determine whether a Chapter 7, Chapter 12, or Chapter 13 bankruptcy is right for you.

     

  4. DoNotPay will then help find the best credit counseling course near you, which you need to complete before filing your bankruptcy forms.

     

  5. Lastly, DoNotPay will gather all of the forms you need (including available fee waivers) and help you locate your nearest bankruptcy court. All you have to do is complete the required forms, prepare your filing fee, and file the application with your local court.

     

And that's it! Once done, the court will give you:

  • Your bankruptcy case number
  • The name of your bankruptcy trustee
  • The date, time, and location of your meeting with your trustee

At this point, your case has been filed! Congrats! The automatic stay now protects you from all debt collectors. Your trustee will then contact you for further financial documents you will need to provide. Make sure to attend your meeting as well as complete the post-filing bankruptcy debtors course!

What Else Can DoNotPay Do?

DoNotPay offers a number of bankruptcy-related resources, as well as solutions for your other financial problems. Easily:

If you're considering filing for bankruptcy to discharge payday loans, contact DoNotPay today!

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