Pay Day Lenders

[stressed910]

I'm hoping for some advice and hopefully some comments that will help put my mind at ease.....
I have 4 payday loan (at storefronts) that have been going on for almost a year (go in every 2 weeks, pay and reborrow...this pattern has finally led me to not be able to pay my normal bills).
I'm now filing for Chapter 13 bankruptcy (as soon as possible). The attorney's office I spoke with advised me that I was a good canidate for Chapter 13 and his advice was to close my checking account before the loans came due (today). I had no other checks outstanding (except the payday checks) so I did just that...closed my account.
HOWEVER,
After reading some things on the internet, I'm now scared that this will be considered check fraud and that they can arrest me or charge me with a felony or something. I'm in Ohio. Three loans are 700 or over and one is 501.
I called my contact today (I have a meeting tomorrow..but I coudln't wait) and he assured me this is not check fraud. But I'm still scared.
I don't want to lose my job because I get charged for a crime. I don't want people harrassed (family/work) after I file for the Chapter 13.
Again, he assured me that this was the appropriate step to take and it would be included...but I'm just scared they will say it is check fraud. Would be bank get involved in anyway if they see checks trying to clear on a closed account?
Please ...any advice will help.
Thanks.

[Faust]

No, not check fraud. They have a "secured" interest in your check for a loan they extended.

I did the same thing, closed my account and opened a new one. All 3 pd loans are on my chapter 7.

Good luck to you!

[BKDefender]

Stressed910:
Here in Nevada we're VERY serious about collecting checks (just google 'Charles Barkley Vegas check' or 'Terry Watanabe Vegas check'. The District Attorney's criminal division won't even touch a post-dated check, nor will the civil division even help collect a post-dated check. The company (payday lender) are required to file a lawsuit to collect the value of the check.
As an example - I just filed BK for a mother & son (both deaf) who had a combined ~8-10 payday loans that they had obtained for another family member who needed help for medical bills (turns out he lied - he used it for other things). The mother finally canceled the post-dated checks and canceled the account. I filed her BK last week, and personally contacted the payday lenders to tell them. Considering they had been cursing at my clients for canceling the checks, it was my pleasure to call them personally.
My favorite response from them "But they can't include payday loans in bankruptcy" and "But I've already filed the lawsuit so they can't file bankruptcy".

--William

[MSbklawyer]

In Mississippi, and in most states, it's not considered "check fraud" or passing bad checks. The reason is because the payday lender knows the check is bad when he takes it. Because if you had enough money in the bank for the check to be good, you wouldn't need to take out the payday loan. I don't know if that's the law in Ohio or not, but check with your lawyer. I can't believe he would tell you to close the account if it was going to get you brought up on check fraud charges. In every place I know of, payday lenders are treated as general unsecured creditors.

[MSbklawyer]

My favorite response from them "But they can't include payday loans in bankruptcy" and "But I've already filed the lawsuit so they can't file bankruptcy".

--William

They are the modern-day equivalent of indentured servitude and the fact that they are allowed to exist confirms my extreme cynicism about all things political.

But me too, William, nothing warms my heart more than discharging about $3 grand of payday loans and having the head maggot call me b*tching and telling me "You can't do that!"

[CCB35]

you have to watch some of these places.when i filed bk over the payday loan cycle,i told the local ones what i was doing ,most were nice about it.one lady ,after i told her went to the bank and cashed my postdated check -that screwed my bank account up!.

[Scott50]

They are the modern-day equivalent of indentured servitude and the fact that they are allowed to exist confirms my extreme cynicism about all things political.


shouldn't people have the "smarts" not to take out pay day loans? The industry would not exist if there was not a market for them...

[Mi Bankruptcy]

They are the modern-day equivalent of indentured servitude and the fact that they are allowed to exist confirms my extreme cynicism about all things political.

shouldn't people have the "smarts" not to take out pay day loans? The industry would not exist if there was not a market for them...

Yes, you would think that. I used one a couple of times to get my car fixed. Ya know, the job that feeds me and pays my other bills. I lived in a place where I did not have family or friends to give me a ride. They served their purpose. The way to get out is never to take more than you actually need to pay your bill.

These places are vultures and should be considered a legalized crime syndicate.. Just without the bats & broken bones etc..

[forgotten]

I don't know if that's the law in Ohio or not, but check with your lawyer.

I can confirm that the same applies to Ohio. You can't accept a check you know to be bad then cry fraud when it doesn't clear. Well of course it didn't, you accepted a bad check, you should be more surprised when it does clear!

[MSbklawyer]

shouldn't people have the "smarts" not to take out pay day loans? The industry would not exist if there was not a market for them...

Of course they should have the smarts to not take out payday loans. But the fact is, a lot of people don't -- and/or they're just so desperate for cash that whatever smarts they do have go out the window.

These kinds of loans are debt traps. Nothing more. A legalized way to extract money from people so desperate that they sign up for the 200 - 500 percent interest. The typical payday borrower receives absolutely no economic benefit from the transaction.

The fact that a market exists for something is a poor argument that such a business should be allowed to exist. I mean, there's a 'market' for sex with underage kids. But for obvious reasons, a civlized society doesn't legalize it.

[Faust]

Of course they should have the smarts to not take out payday loans. But the fact is, a lot of people don't -- and/or they're just so desperate for cash that whatever smarts they do have go out the window.

These kinds of loans are debt traps. Nothing more. A legalized way to extract money from people so desperate that they sign up for the 200 - 500 percent interest. The typical payday borrower receives absolutely no economic benefit from the transaction.

The fact that a market exists for something is a poor argument that such a business should be allowed to exist. I mean, there's a 'market' for sex with underage kids. But for obvious reasons, a civlized society doesn't legalize it.