Can I include my payday loans in bankruptcy?

September 17, 2015 Posted by kingcade

Many individuals on the verge of bankruptcy are also trapped in an endless cycle of payday loans.  This popular source of short-term financing is easy to get, but comes with a high price tag.   Finance charges on these type loans can range from 15 to 30 percent.   That is comparable to getting a loan with an annual percentage rate of nearly 800 percent!  It’s easy to see how these loans can quickly spiral out of control.  But there’s good news- payday loans can be included in a bankruptcy filing.  These type loans are considered an unsecured debt and are dischargeable in bankruptcy.

Because of the predatory nature of many payday loans, bankruptcy courts oftentimes have little patience for the demands of these payday lenders.   However, it is important to avoid taking these loans out immediately before filing for bankruptcy.

After filing for bankruptcy, you should avoid taking out payday loans in the future.  Instead, you should consider the following alternative loan sources:

  • Local credit unions
  • Cash advance on a credit card
  • Small loans from family or friends
  • A small loan company
  • A payroll advance from your employer

If you have any questions on this topic or are in a financial crisis and considering filing for bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade & Garcia, P.A. has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade & Garcia website at

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