When money troubles happen, problems can begin to pile up. Some who want to put off filing for bankruptcy may consider other ways to help them make ends meet and pay the bills. One easy and quick way to obtain money is through a payday loan. Read on and find out more about these loans as well as what might happen when bankruptcy is filed after taking advantage of one.

Various Types of Debt Categories

Not all debt can be discharged with a chapter7 bankruptcy filing. For example, some tax debts, child support obligations, and student loans cannot be listed and thus forgiven by filing for bankruptcy. Among debts that might be forgiven are consumer debts like auto loans and mortgages. Unfortunately, however, those debts are attached to property and are known as secured debts. That means that while the debt may be forgiven, you stand the chance of losing the property the loan purchased. The other category of debt is called unsecured debt and it covers almost all forms of credit card, medical, and personal loan debts. Since no property is on the line, most unsecured debt can be forgiven. It should be mentioned that liens on property caused by medical debts or court judgments should disappear with a chapter 7 filing. Liens placed due to back child support, spousal support, or back taxes may not be removed in some cases.

Payday Loans and the Disclaimer

You might not remember signing all those papers when you took out the payday loan, but you likely signed a loan disclaimer form (may be called other things). This form is common with payday loans and by signing you agree that you won't or cannot list the loan if you file for bankruptcy. Some consumers desperate for the relief bankruptcy can provide fail to include the debt on their bankruptcy because of this form. However, a payday loan is an unsecured debt just like your credit cards and may be not only included but discharged with a chapter 7 filling. Make no mistake, the form you signed means nothing and you can get rid of that punitive and unfair payday loan with a filing.

Loans Right Before Filing

If you took out the loan a few months prior to the filing, you might be asked to prove that you used the funds for necessary items and not for something frivolous. For example, a car repair or new appliance might be okay, a trip to Disney World not so much. Speak to your bankruptcy lawyer about all of your debt, no matter what you signed, and get the debt relief you need.

For more information, speak with a bankruptcy attorney.