The lure of fast cash can be tempting at times when money is tight, which is the exact angle payday loan lenders play when looking for more customers. With some areas of town having a payday loan office on nearly every corner, the payday loan industry has been taking advantage of those in hard times for years. Borrowing contracts carrying interest rates 99% or more are leaving people worse off than before they walked in to borrow money. If you have been a victim of these predatory loans, here is what you need to know about stopping them through bankruptcy:
The Automatic Stay
When you file for bankruptcy the court issues an automatic stay order, which prohibits lenders from collecting on your debts. This order can stop traditional lenders from attempting to collect on a debt, but payday loan lender collections can be tricky. The reason is that when you borrow against a payday loan you are required to submit post-dated checks for the repayment of your loan. This means that there will need to be extra steps taken to ensure the payday loan company does not cash these checks even after you have filed bankruptcy.
The payday loan lender does reserve some rights in cashing your post-dated check after you have filed bankruptcy, but your Bryan bankruptcy lawyer can still offer solutions to avoid these funds from being withdrawn. Your lawyer may advise you to put a stop payment on the check, or to close the bank account from which the check was issued. Your lawyer will be able to best determine which solution is right for you to resolve these debts and move forward.
Timing Of Your Filing
Your bankruptcy filing could be questioned under certain circumstances. There are rules for the timing of your filing in relation to the accumulation of debt. If you were to file for bankruptcy within 70 days of borrowing more than $750, you may not be eligible to include those debts in your case or even be denied bankruptcy eligibility altogether. Your Bryan bankruptcy lawyer can help you determine your debts eligibility and the right timing for your filing.