Often taken as a last minute measure, payday loans are a high-interest, easy-to-procure kind of advance that are meant to be paid back in a few months. Under bankruptcy though, they are treated as an unsecured loan. Before looking for fast cash, learn the payday and title loan risks.
Payday and title loan risks
Payday loans and title loans are exorbitantly priced. A typical title loan or a payday loan can be nearly 300% in interest. If they are not paid by the end of the month or within the set date, they are rolled into the next month with a fee. In due course of time, these loans can rake up so much in interest that it will exceed the principal amount.
In bankruptcy, they are discharged. They are treated like unsecured loans and are readily wiped out. In chapter 13, they are treated like a credit card debt, but with even less priority. You will end up paying pennies on the dollar for it as per your repayment agreement. In some cases though, the lender might decide to fight back and challenge the court’s ruling.
If the loan was taken within 70 to 90 days of filing for bankruptcy, they might choose to challenge the judgment saying that it was the borrower’s (your) intention, to take the money and not have to repay it at all. However, that would mean lenders will have to prove intent to commit fraud and that is not easy. Bankruptcy courts are also not too friendly towards payday and title lenders, so you are quite safe when it comes to their legal retaliations.
However, there are chances that the lender can prove misdeeds, and you will have to pay it out. So, if you are going to file for bankruptcy, wait for a little over 90 days and then file. If you are stuck in the payday loan cycle, end it today. Our team of Rancho Cordova bankrutpcy lawyers can help get you out of debt the right way.
If you have an existing car loan when you file for bankruptcy, there are five options for you. In most cases, you might even be able to hold on to your car. It depends on how far through you are with the payment, and the worth of the car in the years that you have been using it. As always, the outcome will be slightly different for chapter 7 and 13, but the point is, for you to continue using your car, you need to take a few steps. Learn the process of car loans in bankruptcy.
Car loans are based on similar principles as that of home mortgages. The lender agrees to give a loan that is based on a lien that they hold on the car. So, when you pay out the loan amount entirely, you get full ownership of the vehicle.
Car Loans In Bankruptcy
If you are unable to pay out the entire loan and file for bankruptcy, then there are 5 ways in which it will normally go.
- The vehicle will be taken away- In chapter 7 cases, there is a chance the lender will repossess the car.
- Reaffirm the car loan with the lender/loan provider- After a court-approved reaffirmation agreement is signed, the lender can enforce a certain percentage of the car loan be paid.
- Keep the car and continue to pay loans- This is how it will turn out in most of the cases. You will keep the car and make payments as usual.
- Redeem the car loan with a different lender.
- Negotiate new terms with the lender.
Under chapter 13, your car loan will not get written off. Depending on how old the car loan is and the car's current market value, a new payment plan will be created. The interest rates could be reduced for the loan, so there may be a smaller amount to pay every month.
If you are having trouble with your car loan payments or think you are at risk of repossession, contact a bankruptcy lawyer in Sacramento.
The average college student owes $37,172 in debt. That represents one year's paycheck for many graduates. Interest fees are rising each quarter as a result of changing interest rates. Most graduates find that their loan payments are higher than a car or apartment rent. Finding help isn't easy, but there are student loan debt solutions that really work.
Student Loan Debt Solutions That Really Work
First, it is important to know whether you qualify for certain programs. There are a few payment forgiveness programs available. One is the Public Student Loan Forgiveness Plan. This program allows for eligible borrowers to eliminate their balances after 120 months if they meet certain conditions. Eligibility is based on the career field of the borrower. Some examples are government employees, non-profit employees, and some teachers.
If you aren't eligible for the loan forgiveness plan you could seek a loan consolidation. These can be tricky so be sure to know what to look for. If your loan is a federal loan you will probably have to apply directly through your lender. If you have a private loan you can apply to roll your loans into one, which would result in a lower payment. Be sure to find one with a lower interest rate than you have now. Also, it is important to understand the terms and conditions. Make sure there is no early pay off fee or hefty interest as penalty fees.
Often, filing for bankruptcy in Antelope, CA isn't an option for debt relief. This is because student loans are a special debt that isn't easily eliminated through the court. However, you could wipe out other debts like credit cards in bankruptcy to free up income to put towards your student loan debts.
Americans now owe more in student loan debt than in credit card debt. Approximately 71% of all college graduates now carry student loan debt. Of those dealing with student loan debt, 15% are behind on payments. With so many people missing payments, many are now becoming victims. Student loan debt scammers are reaching high and low to take money from debt holders..
Student Loan Debt Scammers Reaching High
Borrowers are more stressed than ever. From super high payments to accounts in default, borrowers can't keep up. Unethical debt relief companies are popping up everywhere. The U.S. Department of Education is warning borrowers to look out for scams. Some of the tactics that they use may seem legitimate, but the red flags are often in the hidden details.
First, any company that offers "instant forgiveness" is a warning sign. No company can promise to immediately or permanently forgive your education debt. This is because your student loan debts are special debts that often do not qualify for certain programs. "Obama plans" and even some cases of bankruptcy in Rocklin CA cannot promise this forgiveness. If the company makes these bold claims, walk away.
Another warning sign is up-front fees. Some companies will promise lower interest rates for large, up-front fees. These often result in the company going out of business shortly after taking your up-front money. These pop-up shops come and go in a matter of weeks and leave you worse than when you started. Never pay up-front fees for debt relief services that aren't run by a legal entity like a lawyer.
Last, be careful of companies that seem pushy or pressure you. These types of sales tactics are designed to scare you. Don't make a quick decision without making sure they are a reputable agency. No real debt relief offer will be for a "limited time only".