Creditors Rights?

[A Nice Creditor]

What is the name of your state?What is the name of your state? Arkansas

Ok, so here is whats up. I started a payday advance one store company about a year ago by borrowing from credit cards, family, and all of my savings. I have lots of debt myself and try to pay these as best as I can.

At this time, I am barely getting by. I have all available money loaned out in advances to others. Recently, I deposited a check from one of my customers that had failed to come in and pick up the check by the due date. The check cleared the customers account. Today, I was notified by a "lawyer" that this particular customer had filed Ch 7 bankruptcy just one day before the due date of this advance. I was unaware of this filing. So, they made this debt 13 days before filing of the bankruptcy. Anyway, this lawyer asks me to deposit the money back into there account. The check was for $398, of which $48 was for the fees on the advance. I gave them $350 of my money for two weeks. When the check cleared their account I got my money back and $48 of their money. Now, do I have to give them their money back and mine?

What I am asking is, do I have to legally allow these people to steal my $350 from me? Like I said, I am just trying to make a living for me, my expecting wife, and my soon to be newborn daughter. These bankruptcy laws are confusing to me and so far I have never received one penny from bankruptcy filers. What can I do to protect myself from what I consider to be "fraud" by someone incurring this debt and then filing bankruptcy so as not to pay it back. It wont take many $350 hits to force me to close down. Thanks

 

[racer72]

You got into the loan sharking, excuse me, payday loan business and don't have a clue about the laws that affect your business? I would suggest you hire an attorney asap. Yes, you will have to put all the money back including your fees. The fines for not complying will be a whole lot more than $398. The bankruptcy court can sieze your assets if you don't. And your attorney can tell you how to challenge the bankruptcy petition and what your chances of recovering your money is. It's probably slim and none.

 

[JETX]

I agree 100% with racer that you decided to get into a VERY questionable business, apparently without any experience or specific knowledge. On top of that, you did so with apparently minimal or insufficient capital to do so properly. Definitely NOT a way to be doing business.

And with that said.....
Bottom line.... you really don't have to return the money on the demand of his attorney, as you were not 'noticed' of the filing until after the fact. However, there is a strong likelihood that the bankruptcy trustee will demand a return of the funds.... and you MUST comply with that request (or have a damn good, solid LEGAL reason not to).

Have you CONFIRMED the bankruptcy filing with the court (and/or gotten a copy from the attorney)?? It is possible that the attorney is lying as to the filing (heaven forbid the thought!! ).

If you decide to not return the money at this time, I STRONGLY suggest you keep those funds available for when the court asks for them. The court will NOT look kindly on a claim of 'I don't have the money'.

 

[bigun]

And, you have the right to show up at the 341 meeting and raise the timing question to the trustee.

 

[A Nice Creditor]

What about Fraud?

Well, Yes, you caught me...I am somewhat inexperienced and under-financed compared to all the other payday advance places. But thats the risks I decided to take and I might not make it, but something about this bankruptcy crap is not right. I have read of trustees not allowing someone to run up their debts purposely and then go and file bankruptcy so as to not have to pay. Isnt there some law or something about 30 or 60 days?

As to me hiring an attorney, like I said in my original post, I am barely getting by. I dont think I could afford an attorney at this time. Maybe I should get one though, and then file bankruptcy when I get my bill from him...lol

Can anyone help me out in ways to protect myself or give me a link to a site where I can get proper forms to help me file objections with the courts?

thanks

 

[bigun]

Does the payday loan industry in Ark. have a trade association that may have some resources?
Post your problem at this site:
http://moneycentral.msn.com/community/message/board.asp?board=YourMoney

Address the post to Undoubtedly-Shotcaller. He owns two payday loan stores in California and has posted extensively about his collection techniques. Here's a hint-he ain't a nice creditor!

 

[A Nice Creditor]

Ok Thanks

OK Thanks, I appreciate the help. I also found the US Bankruptcy site for the state of Arkansas.

One last question, when people have filed bankruptcy petitions, arent they not supposed to enter into any new debts without the trustees knowledge?

And, If people can file bankruptcy, go out and acquire new debts, and then include these in the bankruptcy, can they also include their attorneys fees or have the lawyers made the law to protect themselves and screw everyone else?

And by me being "a nice creditor", I mean that I really try to work with people on repayment if they are having difficulty. As long as they keep the lines of communication open and make any attempt to repay, then I allow. I realize that depositing checks into insufficient accounts only makes the bank $18-$25 dollars richer for dishonered checks and thats $25 less my client has to pay me back.

 

[bigun]

I was just teasing about the nice creditor comment. I'm sure you do try and work with poeple but you'll always have some who for whatever reason won't cooperate.That's when you need to get a little aggressive.
When you file bk, you are supposed to stop borrowing money until the bk is sorted out and they can't include debts created post petition. Are you saying this guy took out a payday loan after he filed bk and now is trying to include it in the filing?

 

[JETX]

Are you saying this guy took out a payday loan after he filed bk and now is trying to include it in the filing?

Bigun, from the OP: "they made this debt 13 days before filing of the bankruptcy."

 

[A Nice Creditor]

Its happened

No, not in this particular instance, this guy filed in-between taking the payday advance and the due date of it.

But I have had earlier cases in which the debtor was already in bankruptcy, I didnt know they were at the time (i check all new customers now) and I ok'ed a payday advance for them and then they included me in a bankruptcy petition that had been filed prior to applying for the payday advance.

Seems unreasonable and unthinkable that someone could legally do that, but I have seen it. Any suggestions? lol

 

[JETX]

Any suggestions? lol

Yep. See my first post.