Lancaster Personal Loan Lawyers
At one time or another, most of us have borrowed money to pay for a large purchase or emergency expense. Such personal loans can take a number of different forms. Some of us simply borrow money from friends or family. Others take out a payday loan or obtain a loan through their credit union. But what happens when you are unable to pay back such loans?
In many cases, a personal loan can be discharged through bankruptcy. The Lancaster personal loan lawyers at Wadhwani & Shanfeld can advise you further in this area. Attorneys Raj Wadhwani and Greg Shanfeld are Board-certified bankruptcy specialists who have helped over 25,000 clients deal with their personal debts. They can review your current financial situation and help you determine if bankruptcy is the right option.
How Bankruptcy Treats Personal Loans
A personal loan may be secured or unsecured. A secured loan means there is some form of collateral guaranteeing the loan. For example, if you take out a title loan, you put up your car as collateral. The lender may then seize the collateral if you fail to meet your loan payments. An unsecured loan, in contrast, is not backed by any property. It is simply guaranteed by your personal promise to repay the lender.
Most unsecured personal loans can be completely discharged in Chapter 7 bankruptcy. This means that once you complete the Chapter 7 process, you are no longer under any legal obligation to repay the lender. And in many Chapter 7 cases, you end up paying nothing on your remaining unsecured personal loans. It does not matter what the status of the loan was before you filed. So whether you were still making payments or the lender obtained a judgment against you for non-payment, the personal loan can still be discharged.
With a secured personal loan, in contrast, you generally need to surrender the collateral to the lender. The bankruptcy court will then discharge your obligation to repay what remains on the personal loan. So you are still protected from any future legal action by the lender.
If you are looking to keep the collateral, or if you have enough disposable income to repay your loans over time, you may instead want to file for Chapter 13 bankruptcy. Under Chapter 13, you agree to a repayment plan that lasts 3 or 5 years. Certain debts take priority in Chapter 13 and most personal loans are low-priority, unsecured debts. So those lenders may still only receive a fraction of what you owe. But once you complete the payment plan, you receive a discharge. And if you have secured personal loans, you may be able to keep the collateral during the Chapter 13 process.
Contact Wadhwani & Shanfeld Today
Dealing with personal loan debt can be stressful. We can help you deal with that stress by coming up with a plan to address your debts and move forward. If you would like to speak with an experienced Lancaster personal loans attorney, contact Wadhwani & Shanfeld today to schedule an initial consultation.