The dangers of payday loans and cash advances in Knoxville, Tennessee are not new. Many people have heard about the risks but never thought it would happen to them. This article will tell you more about how they can affect your bankruptcy Chapter 7 or Chapter 13 filing.
Payday Loans and cash advances are among the most expensive, highest-interest loans available. They can be a trap for those who cannot repay them in time or at all. The finance companies that make these types of loans know that it will be difficult, if not impossible, for you to repay these loans. It’s not uncommon for people to have multiple Payday or cash advance loans at one time. Essentially, you may find yourself getting a new payday loan to pay off the previous one.
This usually leads to a debt spiral that is nearly impossible to escape. But there is hope.
When it comes to payday loans and cash advances, the two can be considered a pretty close match. *Both* are extremely expensive, difficult to repay in such a short span of time due to their high interest rates.
However, there is one deciding factor that will help you decide which loan option is better for your specific needs – fees! Generally speaking, Payday Loans charge an origination fee or service charge as well as being processed through third-party lenders who often tack on additional charges like payment processor processing fees and activation fees just so they can get paid before lending your money back out at outrageous interests rates.
Chapter 7 Bankruptcy will eliminate payday loans and cash advances. These loans are considered normal unsecured debts, just like credit cards, medical debts, etc. In Chapter 7, these debts will be discharged without you paying any of the debt back.
Like Chapter 7, Chapter 13 Bankruptcy will stop the collection of PayDay and cash advance loans. These debts are unsecured and treated as such in your Chapter 13 Bankruptcy, meaning little to none of this debt is repaid to the creditors. Upon receiving your discharge in Chapter 13, any unpaid portion of these debts is discharged.
If you are struggling with too much debt, contact an experienced attorney at Cindy Lawson & Associates. Call (865) 938-0733 to schedule a free, no-obligation consultation, or click here for a free consultation.
We want to help you get your life back. We offer free consultations and the ability to file your bankruptcy online. We can meet remotely or in person. The choice is up to you.