Will Bankruptcy cover Payday Loans and Medical Bills in NYC?


Bankruptcy protection gives people with unmanageable bills the power to eliminate their Payday loans and Medical Bills entirely.  The bankruptcy discharge provides a fresh start, and a “do over” on your financial life.  Every case is unique, and there are pros and cons for every bankruptcy filer, but if you are overwhelmed by high interest debt from payday loans or by a mountain of medical bills then filing for bankruptcy is probably in your best interests. Unlike a home mortgage or a car loan for example, your unsecured debts like payday loans and medical bills have no property involved that can be taken from you if you don’t pay your bills.


Like any loan, a creditor for a payday loan can object to the loan’s discharge if the loan was taken out in bad faith within 71 days of the bankruptcy filing date.  Because of this we may advise certain clients in New York City to wait a few months before filing, but we realize not every client can afford to wait.  Many people come to rely on payday loans as a source of income, and are surviving on them, falling perfectly into the payday lenders trap.  The loans come with outrageously high fees and high interest that build up quickly, and before they know it many of our potential clients are caught in a nasty payday loan cycle.  In general these predatory lenders have a pretty bad reputation with the bankruptcy court.  The bankruptcy court that is trying to help you get a fresh start does not approve of payday lender tactics that make your financial situation worse.  So while a payday loan creditor can object to the discharge of your recent payday loans, they also have to prove that you intended to defraud them and to never repay the loan.  With little patience for payday loan schemes, bankruptcy courts in New York City sometimes view a payday loan that was taken out within 71 days of filing as part of one larger loan that extends to well before this period.  This will discharge all your payday loans and will eliminate them entirely. If you are relying on payday loans but need financial relief now, contact a qualified bankruptcy attorney to review your situation because you are probably not as trapped as they would have you believe.


For many people in New York City today a serious illness or a medical emergency could mean financial ruin.  Bankruptcy protection was crafted specifically with this person in mind.  If you are facing a family health crisis and don’t have the income to pay your medical bills bankruptcy can eliminate your debts and get you back on your feet in only a few months.  There are rules and restrictions to bankruptcy in New York so your attorney may advise any number of debt relief strategies depending on your debt, your income and some other financial factors.  This may include Chapter 7, Chapter 13, or possibly not filing for bankruptcy at all.  The important thing is to find a qualified bankruptcy attorney that will treat your case as uniquely as you are.


If you live in New York City and are overwhelmed by payday loans, medical bills or any number of other toxic debts take the next step after reading this and arrange a free consultation.  It won’t hurt to understand your options, and you have very strong legal protections to help you with your debts.  Destroying your savings to satisfy predatory lenders and outrageous medical bills is another part of the trap.  Stop the cycle now and protect your finances.  If you live in New York please arrange a free consultation with the Law Offices of William Waldner online or by calling 212.244.2882.  We are a boutique law firm with a 99% Chapter 7 discharge record in New York City as of 8/31/16 offering affordable debt relief assistance for all New Yorkers.


This article is intended for educational purposes only.  By reading this article no attorney-client relationship has been created.