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Discharging cash advance debt through Chapter 7

If you're considering a Chapter 7 bankruptcy, you may be concerned that not all of your debts will qualify for discharge, especially some of the more destructive types of debt. Cash advance debts can be some of the worst culprits in driving you deeper into personal debt and feeling like there is no way out, and there is some conflicting information out there about whether or not cash advance debt can be discharged with bankruptcy. Of course, like most serious matters, there is not a simple yes-or-no answer to this question. Can you discharge cash advance debt with a Chapter 7 bankruptcy? Well, probably.

In broad strokes, it is very likely that you will be allowed to discharge all or most of your cash advance debt through a Chapter 7 bankruptcy. It is unsecured debt and qualifies as a type of debt that Chapter 7 can discharge, but there are ways that you may run into trouble if you are not careful.

There is generally a probationary period of at least 30 days before you can file for a bankruptcy on a debt you have incurred, so you would need to wait at least that long before filing. Also, various courts require extra steps like completing a money management course before allowing you to file for a Chapter 7 bankruptcy, as well as ask you to jump through a number of other procedural hoops. If you do not connect all of the dots correctly, the bankruptcy procedure may be thrown out and you may be further in debt that you were to begin with.

If you are considering a bankruptcy to be a get-out-of-jail-free card, you may be setting yourself up for frustration. Filing for bankruptcy will require you to give up a number of things, while simultaneously granting you a great deal of freedom from crushing debt. However, a court may looking unfavorably on attempting to dump debt too soon after acquiring it. It is crucial that you enlist the guidance of an experienced attorney if you are considering a bankruptcy, one who can help you understand the scope of the matter and ensure that your rights remain protected in the process.

Source: Findlaw, "Cash advances," accessed March 03, 2017

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