• FreeAdvice has a new Terms of Service and Privacy Policy, effective May 25, 2018.
    By continuing to use this site, you are consenting to our Terms of Service and use of cookies.

Cash Advance-

Accident - Bankruptcy - Criminal Law / DUI - Business - Consumer - Employment - Family - Immigration - Real Estate - Tax - Traffic - Wills   Please click a topic or scroll down for more.

dannadoodle

Junior Member
What is the name of your state (only U.S. law)? Louisiana
We have filed Chapter 13. One of our debts is a cash advance loan. We made the original loan in July2015 and have been "renewing" the loan every two weeks since then until we filed. Per our attorney's instructions, we let the cash advance business know we were filing bankruptcy the day the payment was due. When we originally made the loan, we had to give them a check for the amount of the loan to hold. I just found out that they have ran this check through our bank yesterday (Feb. 5). Our bankruptcy was filed on Jan 22. Can they do this? I was under the impression that they could not. It's Saturday and I cant call our attorney. Somebody please help.
 


That is a tough call since they held the check before you filed. You will have to consult your attorney. He should have told you to put a stop payment on the check before you notified the loan company.
Bankruptcy code prevents creditors from taking action to collect on debts they are owed after filing, but having the check in their possession since July may throw a wrench in things. I'm not sure what to tell you. I would call the bank ASAP and see if they have transferred the funds yet. If not, they may be able to stop it yet.
 

justalayman

Senior Member
When you told them your were filing bankruptcy did you give them your attorneys contact info? Did you provide the case number once it was filed?


Have you asked them why they did cash the check?
 

OHRoadwarrior

Senior Member
They cashed the check because OP wrote it to them to cover the debt. Whether it will clear after this long is another story.
 

latigo

Senior Member
That is a tough call . . . . . Bankruptcy code prevents creditors from taking action to collect on debts they are owed after filing . . .
Yes, the Bankruptcy Code does prohibit certain acts to recover a claim post filing. An automatic stay order becomes effective the moment of filing.

But why would the payee/creditor's negotiation of the check post-filing be in violation of the automatic stay order in view of Subsection (b)(11) of Section 362 Title 11 of the United States Code?

I can't explain the apparent conflict and I doubt that you can. Perhaps someone with expertise in this specialty field can however.

Why is negotiating a check of the debtor or attempting to negotiate it, regardless of when received not prohibited under Subsection (a) as an act by a creditor to recover a claim incurred prior to the filing?

Then I've never been accused of being smart.

___________

Anyway GO BRONCOS! Unfortunately for "Cam" his usual "hot dogging" was left to be confined to a bun. He spent more time on the turf than a grounds keeper.
 

justalayman

Senior Member
The bank is not required to honor a check that's dated more than 6 months, but it may.

https://www.law.cornell.edu/ucc/4/4-404
yep. Your point?

I said generally stale. I didn't say a bank would refuse to cash it but quite often they will. I know of several offhand that will.
 

justalayman

Senior Member
Yes, the Bankruptcy Code does prohibit certain acts to recover a claim post filing. An automatic stay order becomes effective the moment of filing.

But why would the payee/creditor's negotiation of the check post-filing be in violation of the automatic stay order in view of Subsection (b)(11) of Section 362 Title 11 of the United States Code?

I can't explain the apparent conflict and I doubt that you can. Perhaps someone with expertise in this specialty field can however.

Why is negotiating a check of the debtor or attempting to negotiate it, regardless of when received not prohibited under Subsection (a) as an act by a creditor to recover a claim incurred prior to the filing?

Then I've never been accused of being smart.

___________

Anyway GO BRONCOS! Unfortunately for "Cam" his usual "hot dogging" was left to be confined to a bun. He spent more time on the turf than a grounds keeper.
because it wasn't a check any longer. It became a promissory note since there was a negotiated time it would be "good" different than the date it was written.
 

latigo

Senior Member
because it wasn't a check any longer. It became a promissory note since there was a negotiated time it would be "good" different (?) than the date it was written.
A check is nothing other than a promise to pay, which, unless restricted, is a negotiable instrument. (A rose by any other name, Justy).

Also, if you will read the applicable subsection of Section 362 you will note that the word "check" does not appear. It refers without qualification to a "Negotiable Instrument"!

____________

Now can you lend any insight as to whether there is or is not a conflict in the Code with respect to the prohibitions contained in subsections (a)(3) and (a)(6) with that of subsection (b)(11)?

There must have been some specific design of Congress in adding that subsection, so what was the purpose other than to regard the negotiation, or attempt to negotiate of such an instrument as not being an act by the holder/creditor to "recover a claim".

_________________

There is also another possible issue here and one that could affect whether the creditor's claim for the cash advance is dischargeable.

We are not given to know the proximity of the debtor's contracting for and receiving the cash advance and the filing of his petition for debtor's relief. But if it was done in contemplation of filing, the OP is going to have some problems trying to rinse that claim.

A suspicious mind might conjecture that the advance was used to pay his lawyer and the clerk for the filing fees. Not me of course.
 

Find the Right Lawyer for Your Legal Issue!

Fast, Free, and Confidential
data-ad-format="auto">
Top