What You Need to Know About Bankruptcy and Payday Loans in Ohio

woman holding open empty wallet

Be it an emergency, broken vehicle, or other unforeseen circumstances, it is not uncommon for people from time to time to need a bit of extra cash on hand to get through the hurdles of life. However, one of the most appealing types of cash advances are Ohio payday loans–and they come with their own risks. Here are the key factors you need to know about payday loans in Ohio and how they can impact your bankruptcy.

What is a Payday loan?

Payday loans, also known as “cash advance” loans or “check advance” loans, are a type of short-term borrowing where a lender will provide high-interest credit based on the borrower’s income. The principal of a payday loan is typically a portion of the borrower’s next paycheck.

Known as an unsecured personal loan, these loans may be considered predatory lending due to the high interest charged, as well as the lender’s lack of consideration for the borrower’s ability to repay. In addition, payday loans often have hidden provisions that charge added fees that can create a debt trap for consumers who are likely already in financial trouble.

What hurts many borrowers the most is the due date of the loans where the principal, interest, and additional loan fees must be paid in full. Unfortunately, many borrowers cannot make that payment. Because individuals have a difficult time repaying these loans, they must renew or refinance, creating a cycle where the borrower is continuing to pay interest and fees indefinitely without paying down the principal loan amount.

Can Payday loans be eliminated during bankruptcy?

Can a payday loan be discharged or eliminated in bankruptcy? The answer is that it depends. In general, payday loans can be discharged so long as a 70 day period has passed. You cannot take out payday loans, in general over $750, for 70 days prior to filing for bankruptcy in Ohio.

But, if the 70-day window has passed, or your totals are below $750, you can typically eliminate your payday loan debts in a Chapter 7 bankruptcy filing. In addition, you may only need to pay back a portion of your payday loan should you file for Chapter 13 bankruptcy.

However, because of the stipulations of Ohio payday loans and the issues with the loan schedules often not being in sync with a 70-day time period, it’s best to discuss your options with a bankruptcy attorney.

Can I get a Payday loan after bankruptcy?

The general rule of thumb is that if you are currently undergoing bankruptcy as a debtor, you cannot secure a payday loan. Though you cannot be a debtor, if you are actively paying back your debts as part of a Chapter 13 repayment plan, you may be able to attain a payday loan.

Remember, these loans are not typically the most desirable and you may be better off reviewing other types of credit you can obtain such as secured credit cards or other forms of loans.

Ohio Payday Loans and Bankruptcy: Get Help From The Jones Law Firm

If you have found yourself stuck in the cycle of endless debts because of a payday loan you had utilized but now cannot manage, you need to seek legal counsel from a trusted Ohio bankruptcy attorney.

The Jones Law Firm will review your total debts and the terms and conditions of your Ohio payday loan to see what options are available to you.

If you have Ohio payday loans you cannot afford, let bankruptcy attorney Michael Ryan Jones help you. Serving clients in the Columbus, Ohio area and Franklin County, The Jones Law Firm is ready to help you get the financial refresh you deserve. Contact us today for a free consultation.

Michael Ryan Jones

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Michael Ryan Jones is committed to assisting individuals facing financial distress. He has helped hundreds of clients achieve a financial fresh start by filing either Chapter 7 or Chapter 13 bankruptcy. When you hire The Jones Law Firm, you can be assured that Michael will personally assist you every step of the way.
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