If you’ve taken out payday loans and you’ve been unable to repay them, your debts may have increased rather rapidly.
The high interest rates associated with payday loans means that people can often get into unmanageable debt quickly when they get caught in this type of debt cycle.
When you’re struggling to resolve your financial situation, it’s essential to seek help.
Bankruptcy is just one form of debt resolution that could be a viable option for you.
Of course, you’ll want to find out exactly what bankruptcy entails before you decide whether or not it’s right for you.
For example, people often ask, can I keep my house if I file for bankruptcy?
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Or will everyone know that I’ve been declared bankrupt?
Fortunately, it’s easy to access the information you need by talking to a licensed insolvency trustee and discussing your situation in more detail.
Bankruptcy and Payday Loans
As payday loans are generally unsecured debt, they are included in bankruptcies.
This means that your payday loans will be discharged if you file for bankruptcy while you owe an outstanding amount to a payday loan provider.
However, this doesn’t necessarily mean that bankruptcy is the right form of debt relief for you.
As most payday loans are for a relatively low amount, most people don’t file for bankruptcy if they only have one or two payday loans.
If you have different types of debt, such as payday loans, credit cards and traditional consumer loans, however, bankruptcy may be a more appropriate solution to your financial problems.
Are Your Wages Being Garnished?
When you apply for a payday loan, the terms and conditions often state that the lender has the right to take funds directly from your wages if you fall into arrears.
This means that, if you don’t make payments on time, the payday loan company can take money from your wages.
Sometimes known as a ‘voluntary wage assignment’, most payday loan companies include this in the small print when you sign a loan contract.
If you file for bankruptcy, wage garnishments cease, so the payday loan company will no longer be able to take funds from your earnings.
Is Bankruptcy Right for You?
Although payday loans can cause major financial problems for people, they are rarely the sole reason that someone files for bankruptcy.
Instead, you’ll want to assess your entire financial situation in order to determine whether bankruptcy is the right way to move forward.
Fortunately, you don’t need to do this alone.
With help from a reputable bankruptcy trustee, you can learn more about the debt relief options that are available to you and make an informed decision about what’s right for you.
At Bankruptcy Canada, we’re always on hand to provide the support, information and guidance you need.
To speak to a bankruptcy trustee today, simply contact us at (877) 879-4770 and we’ll do everything we can to help.
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