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In some cases, bankruptcy can help borrowers who have payday loans they can’t repay. Filing for Chapter 7 bankruptcy triggers an automatic stay, which prevents the payday loan company from trying to collect the debt. If the debt is later discharged, you are no longer obligated to pay it back.
Sometimes waiting for the next paycheck is not realistic when you have bills you need to pay today. Payday loans are a quick and easy way for many people to get money when they need it fast. But there are downsides. Payday loans can cause financial hardships in the long run.
What Is a Payday Loan?
Payday loans are often used when someone needs cash fast. They are also known as cash advances, paycheck advances, or check advances. In reality, check advance loans are short-term loans. The loans usually have extremely high interest rates, so you pay much more back to the payday lender than you borrowed. Many companies require you to write a post-dated check in the amount of the payday loan when you obtain the loan. …