It may come where there is a time that you need to file for bankruptcy. Obviously this is something that you truly need to seek to avoid, but that may be too difficult in your situation. What if you have a payday loan still withstanding? Will you be able to file bankruptcy on that payday loan just like you normally would? Is this a special circumstance just like it seems everything else with payday loans are?
Is This Eligible for Bankruptcy?
A payday loan is a lot like an unsecured loan. You are not securing it with any of your assets; all you are doing is taking out a small amount of money and then repaying it when the time is right. Of course, the window for payment is much smaller then your typical unsecured loan. On average a payday loan comes due every two weeks.
Bankruptcy is a means by where all your debts are forgiven if you cannot pay back. But it is not as simple as that. It is not a quick and easy way out. You do not want to apply for 50 payday loans, not pay them off then declare for bankruptcy. When you declare for bankruptcy you forfeit your right to credit for the next seven years. You also may lose some assets in the process. Basically, your financial life is destroyed for a window of time, during which you will have trouble getting loans.
Payday loans can be included in this process. Of course you need to pay attention to the type of bankruptcy you need to follow, and you need to follow your state laws. If your payday loan was too much too handle then it can be included on a bankruptcy, provided your state allows for it.
The Last Step
If you are running behind on your payday loan, but not your others loans do not use bankruptcy! Bankruptcy should never be used for just one small payday loan. It should be used when all your debts and loans get too large for you too handle. But you must be willing to sacrifice your credit for the next seven years. Bankruptcy is not a quick and easy way too get rid of payday loan debt. It can, however, be used to alleviate payday loan debt if that debt and your other debts become too burdensome. You can manage your payday loans effectively with hard work and a good budget. For those times when that is not enough, bankruptcy may be your final debt option.