Bankruptcy and Payday Loans
It may seem that payday loans are a problem when filing for bankruptcy, but they are usually easily discharged. One problem you may have is in trying to stop payment on the check that backs up the payday loan. Sometimes it is easier to just open a different bank account.
Payday loan companies try to say that you can not discharge a payday loan in bankruptcy. This is not true. You can not waive your right to discharge a debt in bankruptcy. If the payday loan company can prove that you took out a payday loan without any intention to pay it back, with full knowledge that you were going to file bankruptcy, then they can win a fraud case against you. Fraud cases in bankruptcy tend to be expensive and payday loan companies rarely, if ever, file fraud cases. The amount of the payday loan in question usually is not worth the trouble. Judges and trustee know that payday loan companies charge a lot of interest and that is how they cover the risk of people filing bankruptcy.
Payday loans are classified as “general non-priority unsecured debt.” That makes them the lowest priority of debt in bankruptcy. In most Chapter 7 cases, they receive no money. It’s only when property is taken in Chapter 7 that they receive any money. In Chapter 13 filings, they are last in line to get paid.
It does not matter if you are current on a payday loan installment agreement, if you have defaulted a long time ago or if you are being sued or garnished for a payday loan. As long as you have not committed fraud, you should have no problems discharging a payday loan in bankruptcy.
Client Reviews
★★★★★
Great service and follow up. Its a scary thing when you need a lawyer but Jason and his team make it less so. Very happy with our outcome. Scott Thibeault
★★★★★
"I can't say enough great things about Jason Newcombe Law Office. I am retired military and I highly recommend Jason Newcombe Law Office. I reached out to Jason's office after sitting for hours reviewing multiple Domestic Violence Law Offices in King County. He responded before that day was over. I spoke with Jason's both in-person and by phone; felt very comfortable with his years of experience and straight talk. He took on my case, took me through the process with sound advice. The Attorney Erin Lane who accompanied me with my court appearances; can't praise and thank her enough for her time, selflessness and educational information prior to each court appearance. She made a really daunting task for me less fearful, given such grim circumstances. I am forever grateful for Jason and the Team of Attorneys." Tommy Harville
★★★★★
"I cannot thank Mr. Newcombe and his staff enough. They are awesome. When I first contacted his offices, I didn't know what to do. I was overwhelmed and confused. He did an amazing job, I highly recommend him! I had two cases, and he got both of them dismissed. If you are in trouble, do yourself a favor, give him a call. " David
★★★★★
"I had Mr. Newcombe's firm handle my ticket and I greatly appreciate their assistance. It was handle easily and with good communication from the associates. If you need assistance with some legal matters then I would refer you to them. " Marvin
★★★★★
"Jason Newcombe and his Associate's are all top notch individuals who will fight tooth and nail for you and go the distance to ensure that you receive the best outcome possible on your case. I would not be where I am today if not for the Law offices of Jason Newcombe. " Eric Brandt