Defaulted Payday Loan...NSF Check to pay loan note...

[Parvonah]

I am in the process of filing Chapter 7...I have been working on the forms for about 3 wks...I have quite a few loans and 2 payday loans...one I defaulted on about 2 years ago but had started making payments on about an year and a half ago (not consistant though)...recently they turned the NSF Payday Loan Check over to the DA's office for collection...How will this be handled in the Chater 7?...Also...I have struggled to pay my loans for quite awhile...alternating at times in order to try paying them until I realized I was sailing a sinking ship and I started Chapter 7...I would give my loan companies postdated checks to make my payments and on occasion would have to call and ask them to hold them for a few more days if our paychecks were late or something else would arise...In one such case I asked they hold the check for two extra days...they agreed but sent it through anyway...of course it bounced...In the meantime I started the filing process...I called this particular loan company to advise them I was having to file...not knowing at the time they had deposited the payment check ahead of time...When they got the check back they called to say I had to pay the check plus fees even though I was filing Bk...I didn't have the money and said I would try to do it in a few weeks...In about a week I recieved a letter giving me 10 days to pay...then they turned it over to the DA's office for collection and I recieved a notice to appear in court for issuing worthless checks...I have done research but am confused...I have read that postdated checks could not be processed as NSF checks...also that a check written to pay a loan payment could not be processed as an NSF check...and that Payday loans are illegal in many states because it violates the postdated laws being NSF processed...I live in Louisiana and would appreciate any insight on this subject...I'm not sure what to do...I have using an online site to file Chapter 7 and the paralegal said not to worry I wouldn't have to go to court for the check...and that they would be discharged...I'm just not sure about this...Thanks for any feedback...

[HHM]

Well, if it the debt on the payday loan becomes criminal restitution, then it will be non-dischargeable.

However, I am a little unclear on your situation, did you (1) default on the payday loan, then later on started paying it back and then one of those checks bounced, or (2) at the time you took out the loan (or extended the loan), did you give them a post-dated check as security. If it is number two, you might be ok and I am surprised the DA is even bothering, if its option 1, then you have a problem.