In my practice as a Denver bankruptcy lawyer, most cases involve a variety of debts, and in recent times where expenses are up and pay checks are tight, more and more cases also include bad checks and payday loans.
In general, bad checks are cancelled in bankruptcy. THIS INCLUDES PAYDAY LOANS!
There are certain issues involving checks that are different from other debts in that there are criminal laws pertaining to check fraud, and there is the ability of a creditor to object to a debt in bankruptcy if it was incurred fraudulently, a threat that debt collectors often use when the debts involve payday loans.
My experience is that these threats almost never come to pass. I am not a criminal attorney, and advise that clients with criminal exposure talk to a criminal attorney, but in processing thousands of cases over the years, many cases involve some payday loans which are discharged right along with credit cards, medical bills, or any other debts included in the bankruptcy case.
WARNING! If you have payday loans, you may have given the creditor post-dated checks, or even your bank account routing number. Be aware that these creditors may try to put through such a check even after filing chapter 7, even though it is improper. If you have this situation, go to your bank and make arrangements to stop payment of these checks or be sure that the creditor cannot access your account through the routing number you gave them.
Give me, Peter Milwid, a call, (303) 831-0733), if you have questions about payday loans and chapter 7 bankruptcy.
