Greenbelt Payday Loans Lawyer

Dedicated Attorney Helping Clients with Payday Loan Debt in Greenbelt, MD

Payday loans are often marketed as a quick fix for financial emergencies, but for many people, they can quickly turn into a significant burden. These short-term, high-interest loans are typically used to cover immediate expenses, but the exorbitant interest rates and fees can make repayment difficult, leading to a cycle of debt. When payday loans become unmanageable, bankruptcy may provide a way to eliminate these debts and help people regain control of their financial future. At The Law Office of Donald L. Bell, our experienced bankruptcy attorney can advise you of your options for addressing payday loans through bankruptcy, offering practical solutions to help you break free from the payday loan trap.

How Payday Loans Can Lead to Additional Financial Difficulties

Payday loans are designed to be repaid in a short amount of time, usually within two to four weeks. However, the terms of these loans often include extremely high interest rates, which can range from 300 percent to 400 percent or more on an annualized basis. For people who are already struggling financially, these high costs make it difficult to repay loans on time. As a result, many borrowers find themselves rolling loans over new payday loans, incurring additional fees and becoming trapped in a cycle of debt that grows larger with each new loan.

For many residents of Greenbelt and the surrounding communities, payday loans create financial difficulties that only grow worse over time. If you are overwhelmed by payday loans, bankruptcy may provide a way to eliminate these debts and get a fresh start.

How Bankruptcy Can Eliminate Payday Loans

Bankruptcy offers a powerful tool for addressing payday loans and other forms of unsecured debt. These loans are not tied to any specific assets or property that is used as collateral. Like credit card debts or medical bills, payday loans can be discharged through bankruptcy, relieving you from the obligation to repay the remaining balance.

There are two main types of bankruptcy that may be used to eliminate payday loans:

Chapter 7 Bankruptcy

This type of bankruptcy may require certain non-exempt assets to be liquidated to repay creditors before debts can be discharged. However, most people who file for Chapter 7 do not lose any property, as Maryland law allows for exemptions that protect essential assets such as a home, vehicle, and personal belongings.

One of the key benefits of Chapter 7 bankruptcy is that it can quickly discharge most types of unsecured debts, including payday loans. Once a Chapter 7 case is filed, the court will order an automatic stay, which will stop all activities or communications that lenders may engage in as they attempt to collect the amounts owed. Within a few months, payday loans and other eligible debts can be discharged, freeing the filer from the obligation to repay them.

Chapter 13 Bankruptcy

This type of bankruptcy allows debts to be restructured and repaid through a repayment plan. Under Chapter 13, borrowers will be required to repay a portion of their debts over a limited period of time—typically between three and five years. Unsecured debts such as payday loans may be included in the repayment plan along with other types of debts and past-due amounts. This allows the filer to make manageable monthly payments.

At the end of the repayment period, any remaining unsecured debts, including payday loans, will be discharged. Chapter 13 is often a better option for people with a stable income who are able to repay a portion of their debts but need more time and structure to manage their financial obligations.

Addressing Payday Loan Fraud Issues in Bankruptcy

While payday loans are generally dischargeable in bankruptcy, certain issues can arise if a loan was taken out shortly before the bankruptcy filing. If a person borrows money through a payday loan with no intention of repaying it and then files for bankruptcy shortly afterward, this may be considered presumptive fraud.

In general, the presumptive fraud rule applies if a cash advance of more than $1,000 was received from a single creditor within 70 days before filing for bankruptcy. This may indicate that the borrower had no intent to repay the loan at the time it was obtained. In cases where fraud is presumed, the court may rule that the debt is non-dischargeable, meaning it cannot be eliminated through bankruptcy.

To avoid complications related to presumptive fraud, it is crucial to work with an experienced bankruptcy attorney. At The Law Office of Donald L. Bell, we help clients understand the appropriate timing of bankruptcy filings, and we can develop strategies to avoid potential challenges related to payday loans and other unsecured debts.

Contact Our Greenbelt Bankruptcy Lawyer for Payday Loan Relief

Payday loans can create a cycle of debt that is difficult to escape, but bankruptcy may offer a way out. At The Law Office of Donald L. Bell, we can help you explore your options for addressing payday loans through Chapter 7 or Chapter 13 bankruptcy, and we will provide you with effective legal guidance throughout your case. Contact our office at 301-614-0535 to arrange a free consultation and get the legal help you need to eliminate your debts, regain control of your finances, and move toward a more secure financial future.

We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.