Indian Tribe loan and chapter 7

[kellysmum]

Back in March, we did not have enough money to pay our house payment (we are surrendering the house but "staying and paying".) Our payment is 1046.00. Coincidentally, in the mail, we got a letter from a tribal lender called Mobiloans who offered my husband a loan for $1100, no interest, but subject to certain fees. Desperate, we took out the loan on March 15 and paid the mortgage. On March 21st, our attorney filed our chapter 7. We were going to try to pay the $320 each month for the loan (for the next 20 months!) but we really can't afford it. Our attorney, whom we saw last week, said we should amend our petition and include it in the filing. He thinks it's worth risking a fraud accusation or, at worst, a rejection for discharge of that particular debt. We went ahead and filed his advice and amended our petition to include Mobiloans. Exactly what pile of sh#t have we gotten ourselves into?

[Pjmax]

Am I reading that right? $320/mo. for 20 mos. for $1100????

[kellysmum]

Yep-the fees were not described that way orignally. It was all very misleading. Plus totally stupid on our parts.

[justbroke]

Exactly what pile of sh#t have we gotten ourselves into?

You'll be fine. It's not worth the money to pursue $1,100. If they weren't charging "interest" then that is some shady -- albeit legal -- loan. You'll just need to wait and see.

Worse case, they file a complaint to determine that the loan is non-dischargeable, and that it should not be discharged. However, you used the proceeds for non-luxury items (mortgage payment), so if I were the creditor, I'd be hard pressed to spend more money trying to claw it back.

Best of luck to you and keep us updated on this! Your case should discharge in late June sometime (I'm just thinking).

[kellysmum]

Thank you, justbroke!

[despritfreya]

Add it to the bk and don't worry about it. You might want to read the link below and then check with your State Attny General or State banking/finance regulators to see if your State is doing something about this.

http://dfi.wa.gov/consumers/alerts/mobiloans-llc.htm

Des.

[bcohen]

$6400 payback on a $1100 loan?! I very seriously doubt that most (or even many) of these loans are ever repaid in full. I suspect that most people make a few payments, then default, usually out of necessity.

Anyways, you should amend your BK filing ASAP to include this debt. Worst case, the lender objects to discharge, but remember that ultimately it is the judge who decides if the debt is dischargeable, and if not, the amount not subject to discharge. I doubt the lender will try and challenge your right to discharge the debt, but if they do, and prevail, it is extremely unlikely that the judge would order you to pay back anything more than the original principal, and most likely you would be given time to do that at 0% interest.