payday loans and chapter 7

[inpain66]

I put them on my list of creditors. I started taking out the payday loans about a yr before I filed. It is a vicious cycle for those that have been through it.

I have no idea if they are able to be discharged though.

I worry about the fact I kept refinancing them and last one was right around 90 days. Refinancing was the only way to survive though cuz they would just come and clean out my bank if I did not do it.

[Tbornetun]

They should be discharged through the bankruptcy. The money was used to survive, not to buy a new TV, right?

[inpain66]

They should be discharged through the bankruptcy. The money was used to survive, not to buy a new TV, right?

No new tv for me. Nothing new for me in a long time

[justbroke]

Payday loans are dischargeable (period).

[inpain66]

Payday loans are dischargeable (period).

I am glad. it was an evil cycle I had to fall into just to survive

[BnkrptcyLwyr]

The problem with payday loans is, that while dischargeable, the cashing of the post-dated check IS NOT a violation of the automatic stay. So, the creditor can STILL cash the check!

Does that mean that you can't get the money back later? No. It is a post-petition transfer which can be avoided under Section 549 of the bankruptcy code. The problem is that it can cost you extra to get the money back.

[justbroke]

The problem with payday loans is, that while dischargeable, the cashing of the post-dated check IS NOT a violation of the automatic stay. So, the creditor can STILL cash the check!

Does that mean that you can't get the money back later? No. It is a post-petition transfer which can be avoided under Section 549 of the bankruptcy code. The problem is that it can cost you extra to get the money back.

Thanks for bringing that up! I've studied several of those cases (because I had a post-petition check cashed by a creditor after I told them I filed). Absolutely fascinating case!

Yes, the cashing of the check is not a violation, but the creditor keeping the money, is!

Fun stuff!

[Nicollette]

I am glad. it was an evil cycle I had to fall into just to survive

I know exactly what you mean. I included several payday loans in my Ch 13, and luckily, the majority of them did not file claims to be paid.

[Tbornetun]

Call the bank and stop payment on the checks.

Wells Fargo has Direct Deposit Advance. I had a client that owed them $500 for an advance, they took it out the day before filing when a direct deposit went in, a week later they put the money back in the clients account stating that because of the bankruptcy they were not allowed to collect for the advanced money.

I was shocked.

[inpain66]

The payday loan drama was so bad I had to get a new bank account!

[jennordhavn]

The payday loan drama was so bad I had to get a new bank account!

I did this many years ago. They continued to try to collect from the old account since the CU wouldn't close it when the balance was zero. Ended up causing over $1k in fees. When I filed BK, I included the payday loans AND the overdrawn bank account (which was ALL fees from the payday loan people trying to get their money).

[WillinVT]

Even though I have never taken out a Payday loan (thank goodness), I have heard a lot of horror stories about them at a different forum I use to read before I found this wonderful place

I remember I use to see commercials for them all the time, but I haven't seen one in probably 6 to 8 months.

The one thing that stuck out the most from the commercial was at the end in the fine small print where it said something like "90% to 99%" interest rate on the loan.

That is insane. These companies that offer these loans should be illegal.

Anyway, best of luck to you in your chapter 7 case.

[tiphani]

I know personally how bad and addictive payday loans are. And they aim for the poor and disadvantaged people...the ones that they know cant pay them back. So what do people start doing...robbing Peter to pay Paul of course...or in this case borrowing from Check and Go to pay Check into Cash. Get it?

It is a vicious cycle...all those places are "Legal Loan Sharks"

I will be so Happy when they shut all those places down!

[Bell30656]

Close your bank account. Each state has different laws but in the state of Georgia accepting a post-dated check is illegal... Then again so are payday loans.

[Klesko]

When I went through the payday loan cycle I had to end up just closing the account. It was much easier then to try and fix the like 5 payday loan companies I owed.