Can I file Bankcrupty if I owe miltiple payday loans

March 16th, 2010 by Questions

I borrowed money from several pay day loan when I seperated. I went trought a credit counselling company, made payments for a total of $2023 but they never pais any of my outstanding payday loans. Now I have several payday loan company treating to take me to small claims court. I`am extreamly worried as I`am now on Mat leave and scared that they garnish my maternity leave as I`am a single mom. Can I file for Bankruptcy for those payday loans?

Posted from: Ontario


One Response to “Can I file Bankcrupty if I owe miltiple payday loans”

, A licensed trustee said:

I want to apologize before I answer your question, but I am going to use your situation to issue a couple of warnings…

First – payday loans are ALWAYS a bad idea. Once you get into the cycle of borrowing money from next week’s pay it is almost impossible to break. You end up like this unfortunate person with more and more loans until it simply becomes unmanageable.

Second – for the most part the companies and people advertising themselves as debt consultants or credit counsellors are not reputable. Most do what has happened to this person – take your payments for the first year or more to pay their fee – only then do they start making payments towards your debts and by then you end up in Small Claims Court because your creditors don’t want to wait to get paid. Before you agree to any credit counselling plan ask if they are members of the national or provincial non-profit credit counselling association. If they are not then be CAREFUL.

Better still, ask them if they are simply going to refer you to a trustee to file a consumer proposal (after you’ve paid their fee of course). You are far better off speaking to a trustee for free than any of these people. If credit counselling is the correct solution for you then the trustee will refer you to one of the not for profits and you won’t be charged a fee…

Now, to the point of your question, yes, you may certainly file bankruptcy for payday loans. About once a month some one in our GTA offices has to do this very thing because the payday loans have gotten out of control.

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