A payday loan, also known as a paycheck advance or cash advance, is defined as a short term loan made available to those expecting a paycheck in the future to repay the debt. The interest rates on these loans are not usually calculated and presented in the same way a credit card interested rate is calculated. Since the terms on payday loans are usually short term (2 or 3 weeks), the interest is usually presented like a flat fee. So, if someone uses a payday loan or $100, they can be charged $15 on top of the original amount when they pay the loan back. In desperation for funds, many people have resorted to payday loans and discovered that they cannot pay the payday loan back in time to avoid penalty charges. When this occurs, the payday loan repayment plus fines and interest can reach an uncontrollable amount.
A payday loan is categorized as unsecured debt. If you cannot afford to pay back your payday loan, a Chapter 7 bankruptcy will resolve this issue. Payday loans, as mentioned above, can quickly reach multiples of the original debt amount due to interest and penalties. Most of these penalties and added fees are written into the contracts. The borrower has usually signed the contract terms which makes the borrower responsible for the payday loan amount that continues to increase as time passes. Chapter 7 bankruptcy can wipe out a payday loan or multiple payday loans along with all of your other unsecured debts. Our attorneys can guide you through a process that will eliminate these debts for good. Bankruptcy is not a temporary solution. Chapter 7 bankruptcy will permanently discharge all of your unsecured debt. Do not waste any more of your resources paying back debt that you cannot afford to pay. Bankruptcy is designed to help you move forward from difficult financial situations and allow you to get back into a normal life.
If you need assistance or would like more information on Chapter 7 bankruptcy, contact Bankruptcy Law Professionals at 855-257-7671. We have locations in La Mirada, Tustin, and Riverside to help clients in Los Angeles, Orange County and the Inland Empire.