Payday Loan Debt

Austin Payday Loan Debt Attorney:

Payday loans are requested by borrowers who typically need immediate cash until their next paycheck comes in. While payday loans may appear to be a helpful monetary resource, in reality their extremely high, usurious interest rates end up costing the borrower much more than they ever realized. A payday loan is granted to the borrower after a postdated check is made out to the payday loan company for the original capital plus interest. If a loan of $150 is taken out, the borrower may typically have to pay $45.00 in interest for a two week loan. At the end of the two week period, the borrower will be offered the option of borrowing more money – at the same unseemly interest rate. If the borrower needs the cash, they’ll take out the loan. Thus, payday loans eat away at the little capital that the borrower had to begin with.

  • If you are in debt to a payday loan company, there are viable legal options available to help you. Fears Nachawati offers a complimentary consultation to those who are in debt with payday loans. Call our Austin office at 866-259-3002 to arrange your free case review.

Are Payday Loans Dischargeable Under Chapter 7 Bankruptcy?

In a Chapter 7 bankruptcy, unsecured debt can be discharged within four to six months of filing. Payday loans are treated in the same manner as other unsecured debt, such as credit cards, and are thus generally fully dischargeable in a Chapter 7 proceeding.

  • It is worthy of note that payday loan companies will often insert a clause in the loan contract stating that if you file for bankruptcy you cannot include the payday loan in your petition.
  • This clause, however, is not only unenforceable, but irrelevant and moot, for the bankruptcy court has the final say as to what debts may and may not be discharged.
  • Therefore, if you owe money to a payday loan company, a Chapter 7 bankruptcy may be a viable option for you.

Are Payday Loans Dischargeable Under Chapter 13 Bankruptcy?

A Chapter 13 bankruptcy plan establishes a debt repayment program that takes place over a period of three to five years. Under this plan, you will be required to make regular consolidated payments for all listed debts. However, the court has the discretion to adjust the amount of the payments so that you will be able to pay, and it may choose to lower the monthly amount. Also, at the conclusion of your Chapter 13 bankruptcy, the court generally discharges all unsecured debt, which means that it is likely the payday loan will eventually be discharged if it has not been paid off by that time.

Contact an Austin Payday Loan Debt Attorney for a Free Consultation:

The Fears Nachawati Law Firm has offices in cities throughout the state, including Austin, Dallas, Fort Worth, Houston and San Antonio. Fears Nachawati is a bankruptcy law firm that has already helped thousands of Texans get a new financial start in life. If you are inundated with debt, whether from a payday loan or from other sources, options are available to help you. Fears Nachawati offers a complimentary case review with a licensed Texas bankruptcy attorney. He will analyze your situation and discuss the options that are best suited to help you get out of debt and start anew. To schedule your appointment, call the Austin Fears Nachawati office at 866-259-3002.