Payday Loans and Bankruptcy

Payday loans, also commonly known as cash advances, check advances, or paycheck advances, may seem like an appealing option to those falling behind on their bills. However, when people start to rely heavily on payday loans, they can get stuck in a pattern and end up filing for bankruptcy.

What is a Payday Loan?

A payday loan described as a short-term, high-cost loan that is generally for $500 or less. These act as a cushion to your immediate cash needs and need to be paid back within two weeks or close to your payday.

Since payday loans charge triple-digit annual percentage rates (APRs), they can be a burden to repay. In fact, if you’re not mindful, you may end up going overboard, and these negligent payday loans may end up costing you a lot more.

Can Payday Loans Be Discharged When Filing for Bankruptcy?

Payday loans are known as “unsecured debt.” This is because they do not entail any property as collateral in case of failure to pay. Unsecured debt is eligible to be discharged when someone files for Chapter 7 bankruptcy. It can also be added in the court structured repayment plan if filed for Chapter 13 bankruptcy. Through this, the debtor is allowed to repay the loan over time at his/her convenience.

Hardship provision is an option given when filing for bankruptcy. This means that the debtor can remove all or a portion of these debts, according to his personal situation. This can be decided and determined by the bankruptcy attorney based on being unable to complete the repayment plan.

Sometimes, lenders will subtly include a disclaimer in your paperwork, which states that the debt cannot be foregone despite bankruptcy. However, you don’t need to worry; these disclaimers have no place in the court of law. Along with unsecured loans, cash advances and payday loans can be fully discharged in a bankruptcy proceeding.

Loans That Cannot Be Discharged in Bankruptcy Proceedings

The point of declaring bankruptcy is to achieve a fresh start rather than skirting creditors with the intention of never repaying their money. To ensure this, bankruptcy courts state that any debt or loan taken within 60-90 days before filing for bankruptcy cannot be discharged.

Things to Pay Attention To

It is usual for some payday loans to be renewed automatically every month till full payment is received. Lenders might try to twist this in the bankruptcy court to show that the loan is newer than 60 days. However, in such cases, your bankruptcy attorney can make the court aware of the loan’s initial date. This will help the court refer to the date you obtained the loan and rule in your favor.

In case a lender has a post-dated check for an amount that is out of your current budget, make a quick trip to the bank, pay a small fee, and get payment stopped on that check. This will relieve you of additional stress in bankruptcy court.

For more information, speak with an experienced bankruptcy attorney – schedule your free 1-hour consultation today: https://seanflynnlaw.com/calendar/

Planning for Chapter 7 Bankruptcy – 5 Quick & Helpful Tips

1. Any debt incurred after the bankruptcy filing date does not qualify as part of your discharge. Therefore, it is best to file when one is sure that they are reasonably sure that they won’t be incurring any further unmanageable expenses while during and after the bankruptcy process.

2. Include all qualifiable debts that you believe you won’t manage in your bankruptcy. Once a discharge is given, most debtors have to wait 8 years before qualifying for another debt discharge.

3. If you are moving to another state, time your bankruptcy filing accordingly. Depending on which state you are in and to which you are moving, it may be more advantageous to file while residing in the one with more generous exemption laws.

4. Be mindful of making large payments to preferred creditors, selling assets, or transferring them out of your name shortly before bankruptcy. It can raise suspicion of bankruptcy fraud, and the court trustee assigned to your case can get the money or property back using a clawback provision.

5. Don’t make the mistake of incurring any further debt shortly before filing for bankruptcy. The fact that you purchased items on credit knowing that you won’t pay the creditor back can make you subject to fraud allegations. Even if it does not result in a criminal investigation, the outcome could still be an objection to your discharge.

#chapter7 #bankruptcy #legaltips #bankruptcyadvice #bankrutcyUS #TX #helpfultips #USLaw

—-Your Common #Bankruptcy Questions Quickly Answered—-

—-Your Common #Bankruptcy Questions Quickly Answered—-

1. Will I lose my house in Chapter 7 Bankruptcy?

In most cases, your house will most likely be exempted from being sold off in a Chapter 7 Bankruptcy case.

2. Can Bankruptcy take my social security?

As per Federal Law, your social security funds are exempt and thus protected in bankruptcy.

3. I am currently unemployed. Can I still file for bankruptcy?

Yes, your employment status does not bar you from filing for bankruptcy. It will, however, impact the chances of a successful outcome in a Chapter 13 bankruptcy.

4. Can my student loans be eligible for a bankruptcy discharge?

In most cases, your student loans are not eligible for a discharge under either Chapter 7 or Chapter 13 bankruptcy. However, it can be wiped out if you can prove that it is causing you undue hardship.

5. I make a lot of money. Do I still qualify for Chapter 7 Bankruptcy?

If your household income exceeds that of your state median, you may still qualify depending on how much are your monthly deductible expenses (e.g., childcare, taxes, debt repayments, utility, and food).

6. Do married couples both have to file for Bankruptcy?

Both you and your partner can file for bankruptcy individually or jointly. Depending on your debt situation and the state you reside in, either of the options could be more beneficial.

7. Will Bankruptcy affect my employment?

No employer will lay you off solely because of your bankruptcy, nor does it, in most cases, impact your employment prospects.

#bankruptcy #US #FAQs #Chapter7 #Chapter13

Debts That Cannot Be Discharged in Bankruptcy

While filing for Chapter 7 or Chapter 13 bankruptcy can release you of debt and give you a fresh start, this is not true for all types of debt.

You don’t have to worry about consumer debt, like most medical and credit card bills, as these fall under the category of dischargeable bills. However, certain debts, based on Congress’s decision, cannot be wiped out through declaration of bankruptcy.

There are three basic categories of debt that won’t be discharged even if you declare bankruptcy. These include:

  • Non-dischargeable debts
  • Debts that won’t be discharged unless you prove your case in court
  • Debts that will only be discharged if your creditor doesn’t object

Non-Dischargeable Debts

It is important to keep in mind that some debts that are non-dischargeable. You will have to pay them off after your Chapter 7 bankruptcy case ends, or you’ll have to pay them in full in your Chapter 13 retirement plan. Basically, there’s no escaping from these debts:

  • Alimony and child support
  • Fines and penalties you owe the state for breaking the law
  • Some tax debts
  • Debts you owe as a result of someone’s death or injury due to your intoxicated driving.

Filing for bankruptcy under Chapter 7 means that you will continue to owe condo, coop, and home association fee (HOA). You will also be liable to repay loans from your retirement plan, including additional debts not discharged under a previous bankruptcy.

Debts That Won’t Be Discharged Unless You Prove Your Case in Court

To get certain debts discharged, you will have to convince the court of your inability to pay them. You will also have to meet legal requirements without which you will be forced to pay back the debt. For example:

  • Student loans
  • Income taxes

Debts That Will Only Be Discharged if Your Creditor Doesn’t Object

There are some debts where you will be at the mercy of your creditor. If your creditor objects or convinces the court that you must pay certain debts at all costs, then you will be obligated to clear your dues. These debts include:

  • Debts that arose from fraud
  • Debts as a result of luxuries worth more than $725 that were purchased within 90 days of the bankruptcy filing
  • Debts as a result of cash advances of more than $1,000 that were withdrawn within 70 days of the bankruptcy filing
  • Debts that arose from intentional and malicious practices
  • Debts that arose as a result of embezzlement, theft, gambling, or breach of fiduciary duty
  • Debts or creditors not mentioned on your bankruptcy papers

Special Cases

The bankruptcy court holds the authority to deny the discharge of a debt, even if it was previously dischargeable. This arises when:

  • Perjury is committed
  • Failure to account for lost or missing assets
  • Destruction of records
  • Intentionally hiding property to defraud creditors
  • Filing for bankruptcy too soon within a given time frame

Renting an Apartment and Bankruptcy

You may believe that finding an apartment in Texas after filing for bankruptcy is close to impossible, but we’re here to help you achieve that dream. Landlords may be wary of the negative mark on your credit history, and everything will seem to go downhill from there.

However, it is entirely possible, albeit challenging, to rent an apartment after declaring bankruptcy. Below is a guide to help you through the application process to ensure you get approved for a lease- the hardest part:

Have an Open Communication

Lying to potential landlords about your bankruptcy is a terrible idea. Most of them will find out regardless when they run your credit history during your application process. Instead, having an open dialogue with them about the circumstances that led up to your bankruptcy, followed by what you have done since to counter it, such as a steady job or income, can help your case.

Proving your innocence and determination to do better is the key- once you convince the landlord to place his trust in you, you are more likely to get through the application process. If not, be proud of yourself for being truthful. Chances are that the landlord appreciated your frankness.

Pick Landlords Wisely

Keep in mind that different landlords have different policies for leasing their properties. Your best bet would be to rent from a private property owner, rather than a complex. They are more understanding and flexible with personal history.

With a bit of research, you might even be able to find an area with a “no credit check” policy. Renting an apartment near a college or university campus may be another factor you could look into. Landlords there have a history of catering to students who have a credit history, so they might be willing to adjust their policies for you too.

Provide Proof of Consistency

Everything aside, all that matters is that you pay your rent on time each month. If you can convince your landlord that you are consistent and reliable, you will have more chance of getting that lease.

If possible, provide your landlord with bank statements or previous rental history to prove that you are a grounded tenant who won’t give him a hard time. Another thing you could do is provide a larger security deposit that will cover the rent for the next few months’. While this could be challenging if you’ve recently come out of bankruptcy, it will make your landlord trust you more.

Find People Who Will Substantiate Your Claims

Most landlords will feel at ease if you can provide some reference to prove your honesty and integrity. These references could be your past or present employers, previous landlords, past roommates, or even some personal references. As long as you have a good standing with the people you refer to your landlord, all is well.

If all else fails, finding someone with good credit to co-sign the rental application will also help make an airtight case. This way, your landlord will (on paper) have someone to take the responsibility of clearing the dues in case you fail to do so.

For more information, speak with an experienced bankruptcy attorney – schedule your free 1-hour consultation today: https://seanflynnlaw.com/calendar/

4 Best Books to Read on Bankruptcy

For those struggling with debt, bankruptcy provides a means to get rid of the financial burden and start your life from a clean slate. Still, bankruptcy remains a little-understood concept by many people, preventing them from fully taking advantage of their legal rights or even attempting to start their case when overburdened with debt. To enhance your knowledge on the subject, here is my recommendation of the five best books to read on bankruptcy.

1. Bankruptcy and Related Law in a Nutshell

by David G. Epstein

Epstein’s work is comprehensive, brilliant, and easy to digest. For those seeking a quick yet sound understanding of bankruptcy, this is book they should purchase. To reflects the changes in the legal landscape, the text receives frequent revisions and updates. Now in its 8th edition, this classic text has been a part of essential readings in many universities for law students for over 40 years.

2. The Attorney’s Handbook on Consumer Bankruptcy and Chapter 13

by John Williamson

Williamson’s book is a highly detailed and informative guide that empowers you with an in-depth on the subject. This is a book aimed towards legal practitioners as a refresher course but the language is simple enough to be accessible to the casual reader. For anyone looking for THE reference book to buy on bankruptcy, this is your purchase.

3. Personal Bankruptcy Laws for Dummies

by James P. Caher and John M. Caher

If you are looking for a concise read that provides straightforward and reliable answers regarding questions on bankruptcy, this handy guide has you covered. The book gives advice on every step of the process, from the filing all the way to your discharge. While certainly not a substitute for a good attorney, reading the book will help put you in ease

4. Solve Your Money Troubles

by Amy Loftsgordon and Cara O’Neill

Becoming overburdened with debt can be a highly stressful and even frightening experience, with constant harassment from creditor and threat of foreclosure. Endorsed by the Los Angeles Times as a must-read, this book packs plenty of great advice on how to get out of your financial troubles and rebuilding your credit.

At the Law Offices of Sean T. Flynn, PLLC, in Austin, TX, we provide personalized legal service and consultation to clients filing for bankruptcy under Chapter code 7 and 13. With over 8 years of experience in the field, we have helped numerous debtors achieve bankruptcy outcomes more to their favor. To schedule your free appointment, call 512.640.3340.

What to Do if You Are Charged With Bankruptcy Fraud?

Bankruptcy fraud is a federal felony that can carry with it a number of severe penalties if the defendant is found guilty, ranging from heavy fines to years in prison. It can encompass a number of different offenses but the most common is of a bankruptcy filer deliberately hiding or lying about the value of their assets to the court.

However, cases can happen where, because of some error or misconception, one may find themselves wrongly accused of bankruptcy fraud. In case you are wondering what to do if you are charged with bankruptcy fraud, here are some legal options available.

Claim It’s a Mistake

If you failed to disclose information on any of your assets in your bankruptcy petition, you could claim that you did so mistakenly. Remember the burden of proof lies with the prosecutors. They will need to show enough evidence to prove beyond a reasonable doubt that it wasn’t a mistake but a deliberate action on your part.

Present a Legitimate Purpose

You can claim as a defense that your action, while deliberate, was done with the intention of a lawful purpose. For instance, you can say that car you sold to your friend at half its value wasn’t to commit bankruptcy fraud but to take advantage of a tax deduction. Again, prosecutors must provide proof of the action being taken with malicious intent for you to be declared guilty.

Withdrawal of Your Bankruptcy Case

If you are still under the Bankruptcy process and are charged with bankruptcy, you could choose to withdraw or renunciate your bankruptcy case. You could testify to the court that you regretted the decision to omit the asset intentionally or that a correction of the paperwork soon after you discovered the mistake. Either way, you can then file a new petition with the correct information presented.

Statute of Limitations

If you are charged with bankruptcy fraud for an offense that occurred years ago, you could argue in your defense that the statute of limitations has already elapsed. Thus, it could be claimed the government has no right to bring up these charges against you. For most bankruptcy fraud-related crimes, the statute of limitations is set at five years starting from the date of the offense or five years from the date or denial of discharge in case of deliberate asset concealment.

Hire a Bankruptcy Lawyer

Being wrongly charged with bankruptcy fraud can be traumatic and if declared guilty, completely ruinous. If you are facing such charges or suspect that you do, it is highly recommended to consult with a professional bankruptcy attorney on your options. For residents in the state of Texas, book a free consultation today with our law office by calling us on our number – 512.640.3340.

For more information, speak with an experienced bankruptcy attorney – schedule your free 1-hour consultation today: https://seanflynnlaw.com/calendar/

Texas Chapter 7 Bankruptcy Exemptions – A Quick Overview

Texas is a state that offers among the most generous of bankruptcy exemptions. Here is a quick overview of which of your assets can be protected during a Chapter 7 bankruptcy case.


Texas allows you to exempt an unlimited amount of equity from your homestead (primary residence). Meaning that even if you have a million-dollar home, you don’t have to worry about its foreclosure to get your debt discharged. Compare this to the Federal exemptions, which is currently capped at only $25,150 – be it for home or vehicle.

However, there is a limit to the size of the homestead, currently capped at 10 acres in an urban area and 100 acres in a rural area.

Motor Vehicles

You can exempt ONE vehicle of any equity from your bankruptcy case for every driver with a license in your household. That means if you have three cars and both you and your partner, as well as one of your children, hold a license, you can all of them exempted in your Chapter 7 bankruptcy case.

And even if a household member isn’t a licensed driver, an exemption may still apply provided that said member “relies on another person to operate the vehicle” for them.

Other Personal Property

Other properties and assets that can be exempted include:

  • Livestock up to varying amount depending on species (e.g. 12 cattle or 120 fowl)
  • Home furnishings
  • family heirlooms
  • Jewelry
  • two firearms
  • tools used in a trade or profession
  • Wearing Apparel

For more information or any other bankruptcy queries, call 512-640-3340.

#Texas #Chapter7 #Bankrutcy #USA

Eliminating Medical Bills with Chapter 7 and Chapter 13 Bankruptcy


Hospital and medical bills are mostly not under our control. Along with the emotional and physiological stress that comes when you or your loved one is in the hospital, dealing with the added pressure of overwhelming medical fees is not easy. This will why people often seek bankruptcy relief after an outstanding medical debt that might have spiraled out of control.

However, what happens then? Like we all know, life must go on. Can you file for bankruptcy and get out of paying your medical bills?

Medical Debt and Bankruptcy

To file for bankruptcy, debts need to be separated into two categories. These include the priority and nonpriority unsecured debt. When you file for bankruptcy, debts like domestic support obligations and overdue taxes do not get eliminated. In fact, they receive special priority treatment. This means that whenever you are in a position to pay the debt, these will have to paid off first.

Medical bills, however, fall under the category of unsecured debts. Like credit cards, they do not receive any special treatment. This quality results in them having the ability to be wiped out when you file for bankruptcy.

How Does This Happen?

Medical debt can be eliminated with Chapter 7, as well as Chapter 11 bankruptcy. To understand which bankruptcy you should file for, you will have to consider your personal situation and see if you meet the qualification requirements.

Chapter 7 Bankruptcy

If you pass the qualification requirements for Chapter 7 bankruptcy, your medical bills will be wiped out along with other unsecured debts, including student loans. Fortunately, there is no maximum limit to the medical debts that you can discharge under Chapter 7 bankruptcy. Whatever bills that have been paid with your credit card will not be taken into account, along with the rest of your credit card bill.

To qualify for Chapter 7 bankruptcy, you cannot have a high disposable income. Your income needs to be low enough to pass the Chapter 7 Bankruptcy Means Test. This calculates your current income to see if you can pay back a portion of your debt. This test is used to disqualify those with high incomes. If you do not pass the means test, you cannot qualify for the Chapter 7 discharge. However, you may file under the Chapter 13 bankruptcy relief.

Chapter 13 Bankruptcy

In Chapter 13 Bankruptcy, bills are included in your repayment plan, alongside other unsecured debt. Unsecured creditors will have to be paid based on your personal income, expenses, and nonexempt assets.

Each creditor is given a pro-rata portion to make them aware of the amount of money going towards these debts. However, there might be chances that you are not eligible for Chapter 13 bankruptcy. You will be required to make enough income to pay all your bills in full as part of your repayment plan. This also includes priority creditors who need to be paid back as soon as possible. Moreover, medical bills and additional debts must fall under the Chapter 13 debt limits.

For more information, speak with an experienced bankruptcy attorney – schedule your free 1-hour consultation today: https://seanflynnlaw.com/calendar/

A Debtor Dies During Bankruptcy Proceedings: Now What?


When someone dies, the loss is heavy for family members, friends, and loved ones. Emotions are strong, and everything seems haphazard. However, what’s worse is when, amidst the chaos, there are legal issues to deal with that arrive if a debtor died after declaring Chapter 7 or Chapter 13 bankruptcy.

If you are an heir or successor of your loved one, the chances are that their estate will be passed on to you. However, this only happens if the debt is a joint debt between the deceased and the heir. Once a debtor passes away, creditors will line up to seek the deceased’s assets by selling the estate or getting their hands on anything that will help satisfy the remaining debt. This means that less amount of assets are left for loved ones.

Death and Chapter 7 Bankruptcy

When a debtor passes away during bankruptcy, we assume that the bankruptcy case is automatically closed, and debts are automatically discharged. However, this is not the case. Since the bankruptcy trustee has the responsibility of liquidating assets to pay back creditors, the bankruptcy involved in Chapter 7 bankruptcy does not impact the proceedings.

This means that the process would continue the same way as it would if the debtor was alive. The trustee has to sell off assets to ensure the creditors get paid. However, creditors may still be interested in the debtor’s estate if their debt has not been fully satisfied. This usually comes under bankruptcy discharge, meaning that this bankruptcy wipes out qualifying debt, such as credit card balances, medical bills, and personal loans.

Death and Chapter 13 Bankruptcy

When a debtor is involved in Chapter 13 bankruptcy, his death has more of an impact than if he was involved in Chapter 7 bankruptcy. For someone who partakes in Chapter 13 bankruptcy, his debt is eliminated through a pre-approved repayment plan. If the debtor dies, a trustee or personal representative will overlook the Chapter 13 bankruptcy. A Chapter 13 debtor has to make payments every month to the bankruptcy trustee for a period of three to five years until the repayment plan has been completed. In case he fails to do so, the court will automatically dismiss the case.

In this case, the trustee of the deceased would be presented with the following options:

Dismiss the Case

The most common option is case dismissal. This means that if a debtor passes away during Chapter 13 bankruptcy, the surviving trustees will allow the case to get dismissed so that creditors can take over the deceased’s estate and fulfill their credit.

Request a Hardship Discharge

Before all essential Chapter 13 plan payments have been completed, the court may grant a hardship discharge. In this case, the creditors will receive the same amount as in a Chapter 7 case. The value of the deceased’s property will not be protected with a bankruptcy exemption.

Conversion to Chapter 7 Bankruptcy

Surviving trustees can request the court to convert the case to a Chapter 7 bankruptcy so that they can receive a discharge. While some courts do not allow this, it purely depends on the court and the judge.

Move on with Chapter 13 Bankruptcy

Courts have the authority to proceed and conclude the Chapter 13 bankruptcy, pretending that the debtor has not passed away.

To know more about how Chapter 7 and Chapter 13 bankruptcy can impact individuals, schedule a free 1-hour consultation click here.

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