If you find yourself stuck in a situation where you depend on pay day loans to get by, that could be a sign that you should consider bankruptcy. Pay day loans carry a very high interest and if you make using them a habit, you will spend a significant amount of your income just making interest payments.
Many pay day loan companies put a provision in their contracts that say you can not discharge the debt in bankruptcy. This provision is not enforceable. You can not waive your right to file bankruptcy.
Pay day loans are just general unsecured debt. That means it is the lowest priority of debt in the bankruptcy process. In most bankruptcies, pay day loan companies receive nothing. If you take out a payday loan knowing that you will file bankruptcy without the intent of paying it back, that is fraud. But if you honestly thought you would pay the pay day loan back and later found yourself in a situation where you could not pay the loan back, then there is no problem discharging the loan.
You may want to stop payment on the check used for the pay day loan if you later decide to file bankruptcy. In some situations, it is best to open a new bank account because of delays in getting a stop payment processed by your bank.
If you are using pay day loans, there is a good chance you are drowning in debt. It might be a good idea to contact a bankruptcy attorney to see what a bankruptcy can do for you. You may find that you do not need pay day loans if you file bankruptcy. Just knowing that you will file bankruptcy in the near future can help you improve your cash flow and give up pay day loans forever.