Payday loan lenders and Ch 13

[MObk1379]

I am preparing to file a Ch 13 in Kansas. I had to take out a payday loan this week for $1150 to cover some unexpected expenses. I intend to pay on it until the case is filed then include it in the case. Do these lenders (in this case CashNetUSA) ever object to discharge due to having a payday loan so soon before filing?

[justbroke]

There are too many issues with what you're writing MObk1379. I would certainly run this by an attorney. First, the debt is likely dischargeable unless the payday lender files a complaint to determine dischargeability. No one can tell you at all whether they would complain to being included. I can tell you that I know of people that had $1,000 loans created just 2 weeks before filing and the payday lender did not object at all (since it costs money and most courts won't side with a predatory lender). That's unless the lender can prove actual fraud. By what you're saying, it "reads" like you knew you were filing but you are or are intending to pay the weekly/bi-weekly/monthly payments until you file. I can't tell you if that's enough to stave off any "threat" of them wanting the debt to be non-dischargeable due to fraud.

The more interesting thing is that you're filing a Chapter 13 and not a Chapter 7. In a Chapter13, the payday lender would file a claim and would get paid "something" back over the duration of your Chapter 13 plan. Chapter 13 Trustees usually don't complain about recovering money for the Chapter 13 creditors the way a Chapter 7 Trustee would. It is entirely possible that you just include the entire amount in the bankruptcy and the creditor would just receive their pro rata distribution from the disposable income.

You will need to look at the Statement of Financial Affairs to determine if you have to disclose the payments within 90 days. Again, for a Chapter 13 I think the Trustee is only looking for the best interest of creditors (a special test in a Chapter 13 to determine the minimum amount you must pay to the unsecured creditors).