Debts like taxes, tax liens, domestic support, student loans, and some kinds of cash advances cannot be included in a Chapter 13 or Chapter 7 bankruptcy filing. An order of precedence exists for repaying debts and a secured cash advance must be paid before one that is unsecured.
A secured advance would have collateral like a car title, while an unsecured advance is backed only by a check.
There are differences between Chapter 13 and Chapter 7 bankruptcies. For example, in a Chapter 7 filing, the borrower must repay payday loans before this debt can be discharged following the bankruptcy.
Included in non-dischargeable debts during Chapter 7 bankruptcy is dischargeable debt, like a cash advance on a credit card, that is used to pay off non-dischargeable debt like past-due taxes.
Most credit card debt is eliminated through bankruptcy but if a lender believes that borrower fraud took place, there can be serious consequences. Borrowers usually do not intentionally build credit card debt and then file for bankruptcy but it can happen.
Under bankruptcy law, cash advance loans totaling $750 or greater taken out during 70 days preceding a bankruptcy filing are considered fraudulent. The borrower will face charges of credit card fraud and the debt will not be discharged.
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