Cash Advances and Bankruptcy
If you're struggling to repay unsecured debts (like those from credit cards or cash advances), you may be wondering whether personal bankruptcy could help you get out of debt and move on with your life. And you're not alone.
To find out more about if Chapter 7 bankruptcy could help you eliminate cash advances, payday loans and credit card debt, schedule a free consultation with a local attorney today. Simply fill out the form below to take action.
Can You Discharge Your Cash Advances in Bankruptcy?
In order to understand whether a bankruptcy filing might work for you, it's important to understand how the typical Chapter 7 bankruptcy case works.
- You pass the Chapter 7 means test: In order to qualify for Chapter 7 protection, you must prove by an income analysis that you don't have the means to make payments under a Chapter 13 bankruptcy repayment plan.
- You file your initial schedules: These "schedules" include information about your income, debts, assets and other financial obligations. When you file this paperwork with the bankruptcy court, your case can officially begin.
- Your bankruptcy trustee liquidates any non-exempt assets: Each state has a list of assets that are exempt from the liquidation powers of the bankruptcy court (exemptions may include a home, a car, work materials, clothing, books and other necessities). Any non-exempt property you have may be sold to raise money to repay some of your creditors.
- The court discharges some or all of your unsecured debts: Assuming none of your creditors objects to the terms of the debt discharge proposed to the bankruptcy court, you should receive your discharge of debt (that is, your legal forgiveness of debt) within three to six months.
The Limits of Bankruptcy for Cash Advance (& Other Unsecured) Debts
There are some situations in which bankruptcy may not be able to relieve you of your cash advance debts or other unsecured debts (that is, debts not connected to any property). These include:
- Recent cash advances: If you incur cash advances totaling more than $750 within 70 days of your bankruptcy filing, the court could assume you took on the debt with the intent to have it discharged in bankruptcy and may therefore not discharge the debt.
- Recent luxury purchases: Similarly, if you made large purchases with a credit card (or if you purchases luxury goods) shortly before you filed your case, the court may refuse to discharge those debts.
- Non-dischargeable unsecured debts: Though these debts are not strictly related to cash advances, there are some unsecured debts that the bankruptcy court does not discharge. These include child support and alimony debt, certain tax debts, criminal fines and penalties, and student loan debts.
Ask a Lawyer Whether Bankruptcy Can Help Your Cash Advance Debt
If you think bankruptcy may ease your cash advance debt woes, take this opportunity to connect with a bankruptcy lawyer in your area.