Bankruptcy Question!!!

[travelguru]

Hello fellow MyFico members, 

I am going to be filing for chapter 7 this week, and the only reason I am doing it is because like an idiot I took out a lot of those payday loans, and installment loans with APR's in the 400-500 % range. I know I am an idiot for taking these out not only once, but many more times over. I would take one out and then wouldn't be able to pay it back, so I would take out another one to pay the original one. Things got so bad, that I now have at least 10 out standing payday or installment loans out there. My question is, if I file for chapter 7 like my attorney said to, will I be able to get the payday loans and installment loans included in the bankruptcy? The reason that I ask is because on each of the loans that I took out, during the application all of them asked if "you have ever or are thinking of filing for bankruptcy?" Since it asked that, and I answered no each time, will I still be able to include these through the court system? Any assistance would be greatly appreicated. Thanks everyone. 

[0REDSOX7]

I think they ask that because the lender could claim fraud if you said no, took out a loan, and then a week later file for bankruptcy.

When was the last time you took out one of these loans?

If recent, be prepared for creditor objections.

[travelguru]

I have been taking these loans out for the past 6 months.....several of them a week. I was answering no to the question of "are you thinking or have you ever filed bankruptcy." I guess I am now worried that my Ch. 7 will not take these loans and zero them out. 

[0REDSOX7]

Your attorney should advise you of this.

Are you retaining your attorney this week or actually filing?

You usually need at least 90 days from new credit to filing to avoid any claims of fraud (burden of proof falls on creditor if 90 days or greater).

[travelguru]

I am retaining my attorney this week and will be filing hopefully this week as well. 

[0REDSOX7]

Retaining this week makes sense.

It takes a few days (in our case, three or four weeks) to get the petition draft done because of all the statements and documents that are required.

Good luck to you!

[DaveInAZ]

Two questions I would ask are:

- What is the combined balance of all those payday loans?

- What is your current credit score?

Filing Ch. 7 will cost you around $2k and do long term damage to your credit score. Have you considered getting a credit card or loan that could pay those payday loans off with an affordable interest rate that will enable you to pay it off in a reasonable time? Those payday loan outfits are going to fight Ch. 7 tooth & nail claiming fraud - that you took out those loans knowing you were going to file BK.

[TRC_WA]

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@travelguru wrote:

I have been taking these loans out for the past 6 months.....several of them a week. I was answering no to the question of "are you thinking or have you ever filed bankruptcy." I guess I am now worried that my Ch. 7 will not take these loans and zero them out. 

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Several a week?

For how much?

[travelguru]

The loans varied between $6000 - $300 in amounts. All in all there is about $25,000 in loans. 

[TRC_WA]

Amazing.... Nice snowball effect. I can't figure out why you would continue to take out loans and why they would continue to loan the money...