Bankruptcy for Payday Loan Debt
Bankruptcy for payday loan debt is a legal proceeding that can discharge most or all of your debt (Chapter 7) or restructure payments into a manageable plan (Chapter 13).
How It Works
1
Consult with a bankruptcy attorney
2
Complete mandatory credit counseling course
3
File a petition with the bankruptcy court
4
Debts are discharged (Ch. 7) or restructured (Ch. 13)
Who Qualifies?
- ✓Debt exceeds ability to pay
- ✓Must pass means test (Chapter 7)
- ✓Regular income for Chapter 13
Pros & Cons
Pros
- ✓Can eliminate most debt
- ✓Stops collection actions
- ✓Fresh financial start
Cons
- ✗On credit report 7-10 years
- ✗May lose assets
- ✗Public record
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