payday loans, credit card debt also checking account overdraft?
how can i pay it off when i do not make that much money. Should i file for bankruptcy or continue looking for options such as settlement co for the loans and credit card debt. Should i forget bout the checking account being overdraft
do not want to take out any more payday loans also for the last several months the account has been overdrawn almost $ 1,000.00 per month
if you write bout getting even more debt on top of other debt when will i be debt free with nothing to worry about. right now the checking account is nearly $ 800 over drafted. last month it was nearly $ 1,000.over drafted
Posted September 9th, 2010 in When To File Bankruptcy. Tagged: checking account, credit card debt, much money, overdraft, payday loans, should i file for bankruptcy.
First, you need to get out of the pay day loan cycle. If you haven’t already, take a really close look at where your money is going. If you have already cut out unnecessary expenses and still can’t make your minimum payments, talk to a lawyer about bankruptcy (many lawyers give a free initial consultation). There is nothing wrong with talking to someone about debt consolidation too, but be careful. I have had many clients who have tried that route, only to end up in bankruptcy a few months and a few thousand dollars later.
Even if you find a successful way of renegotiating your debt, there is one thing you need to be aware of that most companies neglect to mention. That is, the amount of debt that is forgiven by your creditors is considered income to you for tax purposes. For example, imagine that you owe $30,000 to a creditor, but that creditor agrees to accept a lump sum payment of $6,000 to settle the debt. That means the creditor is agreeing to forgive $24,000 of debt. At the end of the year, the creditor will send you (and the IRS) a form 1099-C “Cancellation of Debt” showing the $24,000. You are required to include that $24,000 as income on your tax return. Depending on your tax bracket, you could pay 25% or more in taxes on that amount. The same is true for other types of debts. For example, if you have a car repossessed and you do not pay the difference between the loan balance and the current value of the car, that amount is income to you. Note however that the cancellation of debt rules don’t apply to some mortgage cancellations because of the 2007 Mortgage Debt Relief Act. The rules also don’t apply to debts that are discharged in bankruptcy.
The bottom line is, be careful in picking a debt relief company because it may cost you a lot of money and get you know where. Also, don’t be afraid of bankruptcy. While you shouldn’t take it lightly, it can give you relief and a chance to start fresh. Just make sure that you understand how the bankruptcy rules apply to your specific circumstances.
September 9th, 2010 at 4:36 pmHow would you pay the legal and filing fees for the bankruptcy?
September 9th, 2010 at 4:36 pmMaybe theres no great alternative for you now but there might be shortly. Good luck to you.
September 9th, 2010 at 4:36 pmEverybody has credit ard debt, you;ll just have to deal with that but the good thing is you can pay in installments.
How much is your bank account overdraft? You need to take care of the payday loan ASAP, they most likely have the ability to go into your checking account to get their money. If you can’t cover their money the bank will continue to charge you overdraft fees, thus putting you deeper into debt.
Pay off the payday loan, get your bank account even then worry about credit cards.
September 9th, 2010 at 4:36 pm