Payday Loan Disaster

Question:
I am filing for bankruptcy soon and was curious, if a default payday loan (NSF) because they deposited and my paycheck did not go into my account as usual. They are putting high penalties on this...I am filing pro se...but was wondering if anyone had experience or advice...if I can list this as debt and once filed, will this stop them from harrassing me?

Answer:
Yes, you can list it. Some payday loans are treated as secured debt, which may complicate matters. I *strongly* recommend filing through a lawyer. I've taken over a number of cases where a debtor prepared and filed the various bankruptcy documents without the help of an attorney. Apart from the fact that the schedules generally have to be completely redone (the exemptions are usually wrong, debts are not listed, assets are not listed or are listed or valued incorrectly, the Statement of Financial Affairs is incorrect, and the budget is generally wrong), a number of these people lost their homes as a result of not being advised about what was required, how the process worked, how to value assets, how to deal with various types of debts, etc.--something an attorney is required to do. Others ran into severe problems at the Meeting of Creditors, where they have no one to turn to for preparation or advice, Generally, pro se debtors don't know what the Trustee is looking for, or how to properly deal with the Trustee's questions and concerns. One ended up being charged with bankruptcy fraud--all because she didn't understand the effects of what the information put in their schedules meant. Bankruptcy is a very tricky area of the law (even to attorneys who don't regularly practice it). Interestingly enough for a federal system, it is very state and locality specific. What will work in California, for example, probably won't fly here in Maryland. Do yourself a big favor--see a lawyer. I am so sorry you are in a mess over the "payday loan". Recently, the government has been looking into this type of lending and for now the recommendation is to stay away from them like the plague. Consumer groups are hoping they will be banned outright. Having been penniless myself, I can understand that one must grasp at any lifeline to keep going, but it's best to keep in mind loans like this often simply take full advantage of the consumer. Yikes, I sound like a schoolteacher! Anyway, please heed Mr. Weiss's advice, he really cares about debtors and there is nothing I can add to his post. Good Luck! P.S. Some lawyers will offer a payment plan. Shop around and hopefully you'll find just the right one.





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