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3/5/2020

I have been using a Payday Loan company or Check Cashing store and can no longer pay the fee and I know the check(s) will bounce. Can I file bankruptcy on payday loans or check cashing loans? Can I be charged with a crime or go to jail?

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I continue to see more and more clients come in to see me about filing a Chapter 7 or Chapter 13 bankruptcy after being caught up in the payday loan or check cashing trap.  It’s an easy lure – quick easy money with no credit check.  It is easy for consumers to rationalize that they can pay the money back out of their next paycheck and be caught up.  However, far too often the next paycheck is “already spent” as well and you have to “renew” the loan and pay the fee.

The cycle of renewing these loans becomes extremely draining on a person’s finances which were assumedly already teetering on the edge.  All it takes is one look at the interest rate on these types of loans to see why.  The average “fees” paid on these loans amount to normally between 400% to 720% annual interest rate.  The cycle also often leads to obtaining these loans at multiple companies in an effort to “borrow from Peter to pay Paul.”  The FTC has issued a Consumer Alert regarding these loans Payday Loans Equal Very Costly Cash.

You can file bankruptcy in Alabama on payday and check cashing loans and these loans are dischargeable.  Do not let these companies convince you otherwise.  I have had clients who have been told “You cannot file bankruptcy because you signed a form saying you wouldn’t.”  This is NOT true (wouldn’t every lender do this if it was). 

In addition I have had clients who have been told they would be charged with a crime for writing a bad check.  This again is NOT true.  The crime of writing a bad check is a form of fraud, i.e. saying you have enough money in the bank to cover the check at the time of writing it.  This fraud has to be relied on by the person receiving the check.  In the payday and check cashing loan situation, these companies know the check is not good at the time they accept it; therefore, there is no fraud and there is no crime.

Do not let these predatory loans continue to financially and mentally drain you.  Obtaining these types of loans is often a sign of other debt problems as well.  Make an appointment with an experienced and knowledgeable bankruptcy attorney and see about obtaining a fresh start.

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    I am an attorney located in Cullman, AL. I practice extensively in the area of consumer bankruptcy law, that is, I file Chapter 7 and Chapter 13 bankruptcies for individuals.  I handle cases all over North Alabama and have helped hundreds of clients through the bankruptcy process., I receive many referrals from former clients and their families and other attorneys. Why? Unlike other firms, I have a local office. If you are from out of town, we have the technology available to keep your traveling to a minimum. Also, unlike many firms, you will meet personally with an attorney, not a paralegal. An attorney will handle your case from start to finish. ,

    You will be taken care of throughout the process. We will obtain your credit reports to ensure all your creditors are listed. We will assist you in preparing the forms and then obtain your credit counseling certificate which is required prior to filing bankruptcy for you. We will explain the pros and cons of filing for bankruptcy and the different types of bankruptcy. We will not pressure you into entering into a bankruptcy process that you do not understand. We will be with you side by side through the bankruptcy process. , We represent individuals and work hard to lead them out of the debt traps, through the maze of bankruptcy laws, and to the relief of a bankruptcy discharge.

    ​I am a member of the National Association of Consumer Bankruptcy Attorneys, the American Bar Association, the American Association for Justice, the Alabama Bar Association, and the Alabama Association for Justice. I am a 1996 graduate of the University of Alabama School of Law. I also have a BA degree from the University of Alabama. The Law Office of Richard L. Collins is a federally designated Debt Relief Agency. Richard L. Collins helps clients file for bankruptcy protection under the laws of the United States. Alabama State Bar Disclaimer: No representation is made that the quality of the legal services to be performed is greater than the quality of legal services performed by other lawyers.

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Collins Law Offices, PC  helps clients file for bankruptcy protection under the laws of the United States.
​Alabama State Bar Disclaimer: No representation is made that the quality of the legal services to be performed is greater than the quality of legal services performed by other lawyers.
  • Cullman Bankruptcy Attorney
  • Bankruptcy Info
    • Chapter 7
    • Chapter 13
    • Stop Foreclosure
    • FAQ'S re: Bankruptcy
    • Bankruptcy Attorney Services
    • Alabama Bankruptcy Blog
    • Credit Rebuild Education
  • Contact
    • Get Started
    • Free Bankruptcy Book
    • Free Rebuild Life Book
    • Contact Us
    • Make a Payment
    • Location
  • About Bankruptcy Lawyer