question about payday loans and bankruptcy

[annat]

Hello, I am new to this forum and new to bankruptcy as well. I have credit card debt as well as payday loan debt, and I spoke to an attorney this afternoon about filing for bankruptcy. He told me that bankruptcy would take care of both the credit card debt as well as the payday loans, and he suggested that I allow the payday loan places to go through with cashing the checks and that even though my bank will be at a negative balance, that it will be okay because once I file bankruptcy I can put down my bank account on the bankruptcy. Does anybody here know if this is correct?

The reason I ask is because I just spoke to a friend of mine who said the payday loan places may cash them and if the bank doesn't give them their money, the payday loan places can press charges against me. Is this true? I would ask the attorney I spoke to but he's not in his office for the rest of the evening, and tomorrow is the day I usually go into the loan places to pay at least the finance fees (the attorney said not even to do that, to ignore their calls and if need be, refer them to him).

What should I do?

Thanks for your help!

Anna

[Cramdown]

Don't pay and refer them to him----my .02 worth.

[HHM]

No, payday loan places CANNOT press charges if your "security check" bounces.

Your attorney is correct, you can include your bank...but there is one practical caveat, it could make it very difficult for you to get another bank account. And yes, payday loans can be discharged in BK.

[rrockinggramma]

we stopped payment on the checks for the payday loan people. Our mistake was in letting them know ahead of time we were filing. They held on to the checks. The stop pay was only good for 6 months and they cashed the checks at that time. It was legal for them to do so because we were between refiling's and there was no auto stay in place. Had I known about the 6 month rule for stop pays I would have paid the 25.00 stop pay fee to renew it. So advice, stop payment on the checks you wrote to them and don't tell them you are filing.

[epiphany]

No, payday loan places CANNOT press charges if your "security check" bounces.

Your attorney is correct, you can include your bank...but there is one practical caveat, it could make it very difficult for you to get another bank account. And yes, payday loans can be discharged in BK.

HHM, I have a question along these lines but a slight variation so I hope I am not out of line by posting it in this thread. I left my old credit union account open (with about 5 bucks in savings and 5 bucks in checking) because I don't think that they will let me close it while I owe them money on two loans. I have a creditor (Cashcall loan--I'm an idiot) with whom I am current that is going to submit an electronic debit on the first of next month. I asked my lawyer if I should call them and tell them not to put it through.

My lawyer told me to let in bounce and I told him that it would put the checking account in the negative. He said "so what?".

My thinking is though, I have no bounced checks or payday loans and that going into the negative on that checking account could possibly put me in the Chexsystems that I hear people talking about. I have already opened a new checking account, but couldn't there be other repurcussions? What do you think?

Thanks,
EP

[annat]

My attorney told me to open another bank account tomorrow, that way when the payday loan checks bounce, I'll already have another account and won't have to worry about not being able to open one later on.

What is the difference between stopping payment on checks and letting them bounce? Like, what would be the best thing for me to do?

Thanks for all of your information, it's very helpful!

[FreshLikeADaisy]

Annat, stopping payment does not impact your good banking history record; letting a check bounce does. Both have the effect of keeping money from going to the person you wrote the check to, but a stop payment is deliberate, voluntary, and will not get you into trouble with the bank (though it may well get you into hot water with the people you wrote the check to). Trouble = fees, more fees because the bounced check fees caused other checks to bounce, Chexsystems history, etc.

Note that Chexsystem is different than your credit bureau, and it applies specifically to your banking history. It won't make your life hell or anything like that, and it won't stop you from getting credit as far as I know, but once you get a bad rating with them you will find it very difficult to get new or different bank accounts, checking, etc.

If there's any way you can stop it, it is well worth the money I think, but in the long run you will want to go ahead and open a new account anyway, and the sooner the better, so your atty gave you good advice on that. Be sure to switch any direct deposit arrangements you have when you open the new acct. Good luck!!!

[dpickrn]

Hope this is good news for some ...

Include the overdrawn checking account in the bankruptcy and provide documentation of the discharge of the account to Chexsystem and they will remove the negative entry from their report. You will be free to obtain a checking account with another bank without worry. They did for me and I owed Huntington Bank $2600.00 and WesBanco $150.00. Both were removed.

[FreshLikeADaisy]

Wow, I never knew you could dispute a Chexsystem entry like a credit bureau entry... thanks for the great info, dpickrn!

[annat]

I opened a new checking account on Friday and put in a minimum of 175, and now when I call/go online it says my balance is zero. I was thinking how in the world could I have spent any of that when I don't have checks or my debit card yet?! I did order one book of checks, however at my other account, none of the checks have bounced yet. Once they do bounce and when I get the checks for my new account, if I write one in the future will the ChexSystems automatically reject it? Like, should I just NOT write any checks from now on?

Thanks for all of your advice everyone!

[keepmine]

If you just did this Fri. it's likely the system hasn't updated to how the funds.

[annat]

Does anyone know if it's unusual that when I opened my account and I initially deposited the money, it showed that day on my online-banking page, yet today..two days later..it shows a zero balance? And there's no way I could've had access to the money because I don't have my debit card/checks yet, and the bank's hours on Sat. are limited. I was thinking it's something with the computer system, as I know sometimes it takes one to two business days for the money to be available (?).

[dpickrn]

maybe I was lucky?

I dunno ... I guess I was lucky then. Providing them with copies of my discharge and proof the banks in question were included caused ChexSystem to remove the negative entries. I'd say it's still worth a shot. I've heard lots of ChexSystem horror stories too. I'm just glad mine had a happy ending.

I was just passing on my experience with ChexSystem in hopes that it might help someone else. I have no research or anything like that to support why they cleared my report. I just know they did.

The letter they sent me stated:

"ChexSystems
Consumer Relations
7805 Hudson Road, Suite 100
Woodbury, Minnesota 55125
1-800-513-7125

https://www.consumerdebit.com

July 9, 2007

Dear Mr. Dpickrn:

This letter is in response to your indication that the information below has been included in a bankruptcy filing.

Source of information: WesBanco Parkersburg
Parkersburg, WV
Reported Name: Me
Reported Address: Mine
Drivers License: Mine State: OH
RTN: Mine Account: Mine
Date Reported: 01/12/005
Reported For: Non-sufficient funds (NSF) activity

Source of information: The Huntington National Bank
Columbus, OH
Reported Name: Me
Reported Address: Mine
Drivers License: Mine State: OH
RTN: Mine Account: Mine
Date Reported: 11/20/2006
Reported For: Overdrafts
Original Charge Off Amount: $2,284.13.

Please be informed that it was confirmed that your Chapter 7 bankruptcy case number xx-xxxxx was filed on May 20, 2007 and discharged on September 4, 2007. As a result, the information has been removed from our files.

If you have any questions please contact us at the address listed above in our letterhead, by telephone at 800-934-5458, or by fax at 602-659-2197.

Sincerely,
Consumer Relations
ChexSystem, Inc."

I thought it was too good to be true, so I requested another report and it was clean. I started the whole proces by faxing my bankruptcy documents along with a letter requesting that they indicate that the accounts were included in bankruptcy. It was an even bigger surprise and more than I asked for when they removed the negative entries completely. For very little effort, I am now able to open checkng and savings accounts without woring about the ChexSystem monster preventing me from doing so.

[dpickrn]

In case my advice doesn't work, US Bank is also known to be friendly to people listed in ChexSystem.