Can you file for bankruptcy on a title loan, payday title loan, cash loan or cash advance?
The answer is yes!
Many of you have been pushed into a payday title loan, cash loan, or a cash advance due to the state of the economy. Unfortunately, many of you may not know that a payday title loan, cash loan, or cash advance can have a very, very high rate of interest, along with other charges.
Some states allow you to be criminally prosecuted for a bad check written for a payday loan even though you are bankrupting the payday loan in a Chapter 7 bankruptcy liquidation or a Chapter 13 bankruptcy payment plan. It is our understanding that in Tennessee you will NOT be criminally prosecuted on a bad check written for a payday loan. Thus, you can file a Chapter 7 bankruptcy liquidation or a Chapter 13 bankruptcy payment plan on a payday loan in Tennessee without fear of being prosecuted. The payday loan can be wiped out completely in a Chapter 7 bankruptcy liquidation and reduced by as much as 90% in a Chapter 13 bankruptcy payment plan.
Cash Loan or Cash Advance
A cash loan and a cash advance are usually unsecured. An unsecured cash loan or cash advance means that no property has been put up as security for the repayment of the loan. If your cash loan or cash advance is unsecured, the loan can be completely wiped out in a Chapter 7 bankruptcy liquidation plan and reduced by as much as 90% in a Chapter 13 liquidation plan.
Although title loan companies have attempted to contend that title loans are not secured debts, the Bankruptcy Court for the Western District of Tennessee treats them as a secured debt. Thus, the interest rate you are paying on your title loan can usually be reduced from the 30% to 40% you may be paying to a much lower rate. Presently, the loan rate can be reduced to 5.25%. In addition, your title loan can be repaid over 60 months. This further allows you to reduce the payment to the title loan company. Both of these options can reduce your present payment to the title loan company to a very small amount. Also, it may be possible to further reduce your payment to the title loan company if the value of your car is less than the amount you owe to the title loan company.
Do not act on anything you read on this site without hiring an attorney. This is why we offer, for free, to prepare a bankruptcy petition for you to see what works best in your personal financial situation. We provide representation for individuals who live in Lauderdale, Tipton, Fayette and Shelby County, Tennessee, who qualify to file bankruptcy in the Bankruptcy Court for the Western District of Tennessee located in Memphis, Tennessee.