Filing 7 in a few days..... what to do with my checking account and payday loans?

[shellyp]

Filing Ch 7 pro-se in a few days (Mon or Tues) after a quick decision to file before a garnishment starts.

I read and read on here and am seeing conflicting answers....so...........

2 Payday loans will hit my account on Friday. One for $400 ( a reup on a $200 loan from end of june I have been paying interest on) and one for $300 were done within the last week, as i needed the $ to pay rent and bills, as I am fighting with the bank to get some $350 in unathorized internet charges removed from my checking account. Saved a screenprint from my bank that day by chance in case I had to fight the companies)

I have an open checking account with hardly anything in right now, till payday next Fri.

I realize I may have some trouble with the recent payday loans, but we decided to file right AFTER I got them and am doing an emergency petition.

I have direct deposit.

Do I :

1) Try to open a new checking (bad credit so may be hard) and xfer my direct deposit there?

2) Ask work to change me to a paper check and let what happens to acct on Friday happen, most likely they will bounce and Chase will nail me with OD fees)

3) Close the open checking acct?

4) Leave the acct open, notify the payday loans of my filing status and PRAY they stop before Friday and dont take out the money?

5) Leave it all as is, and pay the loans? One would be the full $300 and the other would be an installment?

6) something else????????

You guys have made this decision to do this so much easier, though rash now, realize I shouldnt have waited as long as I did, but feel good about my choice, so thanks!!!!!!!!!!!!!!!!!!!

[doni49]

You borrowed money--regardless of it's purpose. Then DAYS later, you're going to file BK? Good luck with that.

If you've borrowed money within 90 days (180 is better) prior to filing, it'll be seen as an abuse of bankruptcy. The trustee will most likely shut your case down and although I'm not certain, I'm pretty sure you would NOT be able to file again within 7 years. YES even though you don't get your discharge, you still could not file again within 7 years.

Call a BK attorney first thing on Monday and have a free consultation.

[doni49]

Oh and just paying them back now won't help either (IMHO) because paying them could be seen as preferential treatment.

No offense, but I think you've got yourself a real pickle.

[shellyp]

Now should I be scared to go file an emergency ext today? I wouldn't be afraid to tell them that after I heard about a $900 a month garnishment to hit Friday and that the bank tied up funds on false charges, that I saw no light at the end without more payday loans. Then after talking it over with hubby, I looked into some options and saw this was the only way to go.

But I need to decide today to be able to notify everyone in time.

I am keeping proof of where the money went for sure, and I found this in an old thread, does it hold water? I am under the $750 limit:


11 U.S.C. � 523(2)(C)(i)(II) cash advances aggregating more than $750 that are extensions of consumer credit under an open end credit plan obtained by an individual debtor on or within 70 days before the order for relief under this title, are presumed to be nondischargeable;

BUT.....isn't there always a catch.......a creditor can file an objection to the discharge of their debt if they suspect fraud. This is from Moran Law Group in Mt View CA

Hot buttons for card issuers

While each card issuer has a different practice about non dischargeability actions, each of the following circumstances probably increase the likelihood that the debt may be subject to challenge by the creditor:

* Increase in credit card usage shortly before filing
* Newly issued card
* Large cash advances in months before filing
* Use of card for recent travel or vacations
* Pattern of borrowing on one card to make payments on others
* Exceeding credit limit
* Using card when unemployed or without reasonable belief that the debt can be repaid
* Large balance at filing
* Charges made after consulting bankruptcy lawyer

Generally, the longer the length of time between any particular use and the bankruptcy filing, the less likely the usage will trigger a challenge to dischargeability. A complaint for dischargeability based on fraudulent use of the card may seek non dischargeability for certain of the charges, not necessarily the entire balance.

[keepmine]

If, you have to file soon, stop any DD and get a paper check.

If, the recent payday loan lenders decide to file an AP against you, they'll likely win and those debts won't be discharged. That won't affect the balance of your bk.

[shellyp]

One of the Payday loans, the big one, has an address in Grenadine islands.

So, cancelling Direct Deposit and letting the acct go into negative with Overdraft fees is best?

its not better to close it now?

Should I also be now adding it onto my Creditor mailing matrix then too?

So.... confused right now.

[drowning123]

Girl, please. I had the exact experience as you. I took out a payday loan a month before I filed. I didn't even make their first payment, but I filed BK anyway. Nothing happened. 341 was smooth sailing.

I withdrew all my money early in the morning around (3 AM) before the payday loans hit at about 6 AM. I suggest you do the same.

My credit was extremely bad, too, and I was able to open a new checking account and a savings account. Please hurry and do so and change your direct deposit.

[shellyp]

drowning 123.... it makes me feel so much better! i am gonna go for it. one look at my bank statements and a trustee could see there was nothing frivolous about it, just trying to keep my head above water for now.

Ok, work has cancelled the direct deposit and I can pick up a live check at the office on Friday! YAY!

OK, so what about the checking acct that will be negative now as of Friday when the payday loans can't get their money? leave it open, add it onto the martix or close it now (i only have a checking acct with them)?

(Again, this was not done intentionally! We could survive a few more months with payday loan fees but not with the $900 garnishment, I would have to not pay my car payment or starve the 4 kids, and they really dont like it when I do that, haha )

[Freddy03]

I have 2 payday loans that I can't pay back either. My attorney said it would be included in my BK. If they file AP I would most likely have to pay it back.

Drowning- did your payday place file an AP?

[shellyp]

ohoh, and I read somewhere on here that it costs a decent chunk of money for a creditor to file an AP. Wondering if it would be worth it to them to even do it????

[drowning123]

Shelley, yes you can include the checking account in your BK. Mine has been -$225 for almost 2 months now. I actually wanted to pay it off, but they wouldn't allow me. They claimed that I need to show proof that I paid the payday loans. Ha! I withdrew all my money on the morning before the payday loans hit. I needed the money to pay my attorney.

Shelley, no need to explain. Do what you gotta do.

Freddy, the answer is no - no AP. But of course, I won't be discharged until November 23. Fingers crossed!

Also, yes, I included every payday loan. I had a lot. About 9. Yikes!

[drowning123]

For 300 bucks? It would be a waste to file an AP. They already got so much out of us. I don't feel bad for them.

[LaurieM]

Are these payments that are to be presented on Friday actual checks you wrote to the pay day loan places or pre-authorized debts? Pay day loan places can be sneaky ... they will often process debits for lesser amounts when the original amounts won't go through. Also check with your bank to see if you can put a stop payment on the checks if they are in fact checks.

[Nicollette]

I would do as drowning said and include the checking account in your BK. I was caught up in the payday loan mess myself(both internet, and store payday loans), before I filed and I included all of them in my BK. I also banked with Chase at the time of the payday loan mess and I tried to close that account before the loans hit, but Chase told me that even if they closed it, and something tryed to come through(a paper check, or an ACH debit) within 30 days of closing it, the debit could possibly force it back open. Basically they were telling me that a closed account needs 30 days of inactivity before it is actually closed

[shellyp]

These were pre-auth debits, not checks.My direct deposit is closed, and I will get a paper check. I listed Chase on my matrix, and am going to the BK court today to file emerg petition. Went all the way into downtown denver yesterday to be reminded I am an idiot and it was Columbus Day! Will go there again this AM. Thnaks all!