The Correlation Between Bankruptcy And Payday Loans

It was recently reported from a survey that there was definitely a clear correlation among bankruptcy and payday loans. The group surveyed was first time payday loan applicants.

Canada, CO (prHWY.com) September 6, 2011 - With much more and more Americans living paycheck to paycheck nowadays, several have taken a step further by utilizing payday loans. Let's get something straight, payday loans aren't very good for anybody. Let the statistics speak for themselves, the those who use payday loans are seven times much more most likely to end up filing bankruptcy than those who do not. It seems pretty self-explanatory, but obviously the folks that use them just don't realize. Each and every year you will find more than 10 million American families that use payday loans as a lifestyle. Some of these loans, when added up have an annual interest rate of 450%. It does not seem like a superb deal to me. When putting on your frequent sense goggles, it appears fairly clear that is the reason in between correlation of payday loans and those filing bankruptcy. It was recently reported from a survey that there was definitely a clear correlation among bankruptcy and payday loans. The group surveyed was first time payday loan applicants. The outcomes were that the applicants experienced a 90% improve in bankruptcy filing rates.

If you are in a financial position or you feel it essential to get money in this way, do yourself a favor and consult a bankruptcy attorney just before going any further. Living paycheck to paycheck is bad adequate, but once you start borrowing on future earnings you may dig yourself a hole that you simply will in no way get out of. The good news is, filing for bankruptcy can and will eliminate these outstanding loans.

Recently, a federal appellate court ruled that a post dated payday loan check may be cashed even soon after the bankruptcy is filed. The downside to this may be the debtor might not have the ability to keep the funds. When a bankruptcy is filed an automatic remain is put in spot which will stop all collection activity from the debtor's creditors. This means that even payday lenders can't attempt to continue to employ the money right after being notified even if the check was cashed. This is most bankruptcy courts have ruled that even though a check can be cashed, the money is portion of the bankruptcy estate.

When filing bankruptcy, if someone is holding one of these checks and counting on utilizing the dollars for living costs, be aware that this dollars might be taken. An individual filing bankruptcy ought to discuss this with their bankruptcy attorney as laws differ from state to state. The last thing a debtor in bankruptcy needs is always to bounce checks to their landlord or mortgage holder.

In a bankruptcy filing a debtor really should be conscious that the bankruptcy trustee can pursue any post-bankruptcy transfers, such as checks written by the debtor. The debtor need to discuss this matter with their bankruptcy attorney. The attorney can make contact with the trustee to get permission to permit the debtor to continue making their bill payments for living expenses.

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