Chapter 7 Success Lawyers Chicago - Are Payday Loans Discharged?

Are Payday Loans Discharged?

Actually you bring up an interesting point too because payday loans are so very prevalent. So, that’s something that would be able to, if you qualified for Chapter 7, to be able to be wiped out completely. Would it not?
Yes. Now, let me ask you. This is something that I’ve come across a few times too and people want to know and it’s also prevalent. Those are those title loans where you bring in your car title and they give you cash. What happens with that situation? Does that mean that that get’s discharged and they have to give me my car title back? Say I borrowed $1,000.00 on my car and they have my title. What does the debtor do?
Well, that creates a security interest in the vehicle. So, if you want to keep that vehicle, you need to continue to pay, to pay off that title loan. Otherwise, you’re subject to the same rights or you could be repossessed just as if Ford Motor Credit held the title. Just because it’s a payday loan store that has your title loan, you still have to pay that back if you want to keep the car. There is one exception to that. If you file a bankruptcy and you no longer want to keep the car, maybe it’s not running, maybe it’s not worth what you owe on the title loan, then you can decide to surrender that vehicle and get out of the debt.

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