payday loan and chapter 7

[blum1176]

we have a payday loan that is out(it was a necessity) we filed emergency on the 30th of april, it is scheduled to come out on the 15th. how is this classified(what schedule) and when would this need to be paid back. I know anything w/in 90 days is paid, but WHEN would i need to pay them? would it fall under the automatic stay and then i pay them later? how would all of this work?

[justbroke]

It is unsecured debt. Notify the payday loan company and you should stop payment. They are not entitled to the money... unless you did this on purpose (to defraud them).

It's not that anything within 90 days is paid. It's that you're considered insolvent within 90-days of filing when it comes to certain things (like preferences). Depending on the amount of the payday loan, it's probably not going to be an issue, but many of those companies are aggressive.

They are bound by the automatic stay, but it doesn't mean that they won't cash your post-dated check. You need to take actions to prevent them from doing that... or to go after them if they do. It is not a violation to actually "cash" a post-dated check. It is a violation to "keep" the money, though, when they are not entitled to it. They are not entitled to it based on general facts. They would need to ask for relief from the automatic stay to "keep" the money.

Did you use a guidebook?

[blum1176]

i need to add them on the creditor matrix.
do i put their information on another disk aor send a hard copy for an amendment to my matrix?

[GettingGoing]

i need to add them on the creditor matrix.
do i put their information on another disk aor send a hard copy for an amendment to my matrix?

You will need to follow your districts procedure for adding a creditor to the matrix. I just added a creditor to the matrix and in my district I had to notify the creditor via mail that I was filing bk and the date of my 341 as well as submit paperwork amending the matrix to the bk court. My advice would be to call your bk clerk and ask what is needed. The forms I needed were not available online so I had to drive to you federal courthouse and get them from there.

[justbroke]

Yes, please follow what GettingGoing wrote. Contact your Case Manager with a "procedural question". That question should be on amending a particular Schedule and updating the Matrix.

[69corvair]

The question will be whether the payday loan was above the threshhold for obtaining cash or luxury goods within the 90 days prior to filing - Most don't go that high, and even if it did, the payday loan company would have to file an adversary proceeding to declare the debt nondischargable & would probably cost them more in legal fees than they'd ever get chasing you for the money.

[justbroke]

Yep, that's a very high threshold for a payday loan. However, the lookback is 70-days and $750 for a payday loan (from the same creditor).

Typically, most creditors do not pursue adversary proceedings for amounts less than $4K as that's about the minimum amount to prosecute one. The filing fee alone for an Adversary Proceeding is $150. Tack on at least 2 hours at $250/hour for an attorney to prepare the Complaint, issue the summons, etc... and you're at $650 without even seeing the inside of a courtroom.