As the monthly bills begin to pile in each month, it may be tempting to consider using a payday loan or a cash advance to bridge the gap. But cash advance lenders are a costly option and many people find themselves taking out additional loans the following month just to get by. If you’re regularly relying on a cash advance loan, filing for bankruptcy can help you wipe out the debt and break the cycle.
Las Vegas Bankruptcy Lawyer Counsels Individuals on Debt Relief Options
What is a Cash Advance Loan?
Payday loans or cash advance and car title loans are all high-interest short-term loans, usually from $100 to $1,000, and are used to tide you over until you get paid off. In fact, however, it is difficult for most people to gather enough cash to pay off the loan once they get their next paycheck. Many individuals resort to taking additional cash advances simply to service those that they already have. A typical cash advance loan payment takes 36% of the borrower’s paycheck.
According to Pew Charitable Trusts, it takes the typical cash advance loan customer five months to pay back the original loan. Over the course of that time, the payday lender customer typically pays $520 for an original loan of $375. The problem is that over the course of weeks, you’ll pay an amount that will easily exceed the principal originally borrowed. Rather than being helped, borrowers are often thrust into a downward financial spiral that is difficult to exit.
These short-term loans are now big business with an estimated 12 million Americans annually relying on cash advance lenders just to get by. If you need assistance breaking the cycle with cash advance loans, contact a bankruptcy attorney Las Vegas.
Las Vegas Bankruptcy Lawyer: Bankruptcy Will Get Rid of Payday Loans
Ch. 7 or Ch. 13 provides permanent relief by erasing debt from cash advance loans, in addition to credit cards, medical bills, and other kinds of debt. Most often individual borrowers file one of two types of bankruptcy:
- Chapter 7 bankruptcy also referred to as straight bankruptcy or liquidating bankruptcy; and
- Chapter 13 bankruptcy requires a repayment plan of three to five years.
Qualifying for Ch. 7 Bankruptcy.
Cash advance loans and other debts can be discharged (forgiven) in as few as four to six months. First, you must meet income qualification eligibility requirements. Your Ch. 7 bankruptcy lawyer can help. After filing your bankruptcy petition with the court, creditors, such as payday lenders, must stop their attempts to collect your debt. The court appoints a trustee who will review your case and ask you questions at a hearing called a 341 meeting of creditors to verify the information you provided on your paperwork.
If you have questions contact Las Vegas Bankruptcy Lawyer John Ryan at 702-800-9999 or click here.
Protecting property in a Ch. 7 Case.
In exchange for a discharge of your cash advance loan debt and other debts, the court may take some of your assets to sell to pay your creditors, although that’s rare. You are generally permitted to keep property such as most household goods, furniture, electronics, clothes, tools, and medical equipment. You will likely be able to keep your car, and you may be able to keep your home or some portion of the equity you have in a homestead.
Discharging Cash Advance Loans and Other Debts
If no problems arise in your case, the court will issue an order discharging your qualifying debts. A bankruptcy lawyer can explain whether any of your debts could survive the bankruptcy case.
Cash Advance Loans in Chapter 13 Bankruptcy.
If you do not qualify for a Ch. 7 bankruptcy, or if you want to keep assets that you would otherwise lose in a Ch. 7 proceeding, you may want to consider filing a Ch. 13 repayment plan. In a Ch.13 case, you will propose a plan to cover some or all of your debts over the course of three to five years. Just how much you will pay over that time is dependent upon the type of debts that you owe and how much money you have each month after deducting income and expenses.
The trustee, your creditors, and the Court will review the plan to determine if it conforms with bankruptcy requirements, if it does, the court will approve/confirm it.
Ch. 13: Making Your Payments
You will make payments to a Chapter 13 Trustee. The Bankruptcy Trustee will use your payments to make distributions to your creditors. Filing a Ch. 13 may also allow you to catch up on past-due house payments and other obligations. Obligations such as child support, alimony, income taxes, car, and house payments can be included in your Ch. 13 plan. While in your plan, you’re going to be protected from creditor collection activities. Upon completion of your plan payments, you are going to get a discharge of any remaining debt balance.
Finding a Bankruptcy Attorney in Las Vegas
Attorney John Ryan of Ryan Bankruptcy and Injury Law is zealous advocate for consumers struggling with significant personal debt. Attorney Ryan urges consumers struggling with cash advances and car title loans to meet with a consumer debt lawyer. Finding an experienced bankruptcy attorney in Southern Nevada is easy. Attorney Ryan recommends consumers searching for a Ch. 7 or 13 lawyer, do their homework by searching Las Vegas bankruptcy lawyer reviews.
If you struggling with personal debt, you may not think that you can afford a lawyer. Attorney Ryan says that this may not be the case. You may think that you will have to search for a cheap bankruptcy lawyer Las Vegas to find an affordable counselor. However, many top bankruptcy lawyers Las Vegas offer payment plans that make filing Ch. 7 or 13 affordable.