Filing for bankruptcy in Wyoming is often a last resort for individuals overwhelmed by debt, including personal loans and payday loans. These types of unsecured debts can quickly become unmanageable due to high interest rates and aggressive collection efforts. Understanding how bankruptcy treats these obligations can help you make informed choices about your financial future. At Wiggam Law Office, LLC, we can provide legal assistance to the Cheyenne public navigating these difficult circumstances.

How Bankruptcy Treats Personal Loans in Wyoming

Personal loans—whether borrowed from a bank, credit union, online lender, or private individual—are typically considered unsecured debts. In most cases, unsecured debts are fully dischargeable in a Chapter 7 bankruptcy. This means:

• You are no longer legally required to repay the debt once the court grants a discharge.
• The lender cannot pursue collections, lawsuits, or wage garnishment after the discharge is entered.

However, if you obtained the loan using false information or committed any type of fraud, the lender may challenge the discharge. Most straightforward personal loans, though, are eliminated without issue under Chapter 7.

Under Chapter 13 bankruptcy, personal loans are included in your repayment plan. While you may repay only a portion of what you owe, the remaining

balance is typically discharged at the end of your plan period.

What Happens to Payday Loans in Wyoming Bankruptcy?

Payday loans are known for extremely high interest rates and short repayment periods, often trapping borrowers in cycles of debt. Fortunately, payday loans are also considered unsecured debts, meaning they can be discharged in both Chapter 7 and Chapter 13 bankruptcy.

However, there are some considerations:

1. Recent Payday Loans May Raise Questions

If you take out a payday loan shortly before filing, the lender may argue that you never intended to repay it. While this does not automatically prevent discharge, it may require additional explanation.

2. Postdated Checks Are Protected

Many payday lenders require postdated checks. Bankruptcy stops the lender from cashing those checks once the automatic stay takes effect.

3. Wage Assignment Stops Immediately

Some payday lenders use wage assignments as a form of repayment. Bankruptcy automatically halts these assignments, preventing deductions from your paycheck.

How the Automatic Stay Protects You

Once you file for bankruptcy, the automatic stay goes into effect. This is a powerful protection that:

• Stops all collection efforts
• Prevents lawsuits or garnishments
• Halts harassing phone calls and letters

This protection applies to both payday lenders and personal loan creditors.

Can You Keep Your Property?

Because personal and payday loans are unsecured, they are not tied to collateral. Filing for bankruptcy in Wyoming generally allows you to:

• Keep exempt property, such as your home, car, and personal belongings (depending on applicable exemption laws)
• Eliminate qualifying unsecured debt without losing assets in most Chapter 7 cases

Your bankruptcy attorney will help you understand exactly what property you can protect.

When to Consider Bankruptcy for Loan Relief

Bankruptcy may be a practical option if:

• You have multiple payday loans or personal loans with high interest rates
• Creditors are threatening lawsuits or wage garnishment
• You cannot keep up with minimum payments
• You are using new loans to pay off old ones

Bankruptcy offers a legal and structured way to regain control of your finances.

Conclusion

Personal loans and payday loans can create significant financial stress, but Wyoming bankruptcy offers a path toward relief. Whether you are considering Chapter 7 or Chapter 13, understanding how these debts are treated can empower you to make the right decision. At Wiggam Law Office, LLC, we can provide legal assistance to the Cheyenne public seeking guidance through the bankruptcy process.