Payday Loan Debt: Is It Eliminated By Going Bankrupt?
Payday loans are often taken on as a form of repaying other existing debts.
But by borrowing this money through a payday lender, it’s vital to know that you’re only delaying having to file for bankruptcy and won’t solve the underlying debt.
If you’re looking to file for bankruptcy, you might be wondering whether or not it will discharge you from payday loan debt.
A concern of many that have taken on this type of debt, it’s important to know that these types of unsecured loans are dismissed under the Bankruptcy & Insolvency Act in Canada when you take this financial step.
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Benefits of Bankruptcy with Payday Loan Debt
As aforementioned, by opting for bankruptcy, your payday loan debt will be dismissed and you won’t have to worry about your creditors harassing you for the money.
Alongside this, filing for bankruptcy is an ideal way of repairing your credit and saving money, as well as leaving you with more money each month for personal living costs.
As long as you’ve gathered all of the details of the loan and given it to your trustee, your creditors will be notified and the collection actions will come to a halt.
Without this accurate information, you could be held legally responsible, leading to bigger problems down the line.
So make sure that you’re honest and open with your trustee from the get-go.
Key Factors to Consider
Ensure that before filing for bankruptcy, however, you seek the advice of a licensed and professional trustee, who will guide you in the right direction for your individual financial circumstances.
Alongside this, there are particular instances when claiming for bankruptcy isn’t the best idea when you have payday loan debt.
For example, if you have other debts alongside this, it may be better to ask the payday lender if you could repay the loan in smaller, more manageable chunks.
This guarantees that your credit score isn’t affected and you don’t have to worry about the aftermath of bankruptcy.
Is There An Alternative? The Consumer Proposal
If you’re looking for an alternative way to be discharged from a payday loan without filing for bankruptcy, you’ll be happy to know that a Consumer Proposal might be just the ticket.
Also eliminating payday loan debt, it’s a viable alternative if you’ve got surplus income, want to keep all of your assets and you have a $10,000 or above in debts, including bank loans, credit cards and payday loans.
Are You Seeking Debt Relief?
If you want further advice on how payday loans are treated in bankruptcy, then look no further than Bankruptcy Canada.
With over 20 years of experience in the industry, we’re here to help anyone in Canada looking for debt relief services.
Simply get in contact with one of our licensed and trusted trustees today on (877) 879-4770 or by emailing us through our website.
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