Are your check cashing loans dischargeable in bankruptcy?

What is a check cashing loan?

A check cashing loan is a short-term, high interest loan that is secured by a post-dated check.  More and more people are turning to check cashing loans as a means to stay afloat with their bills between paychecks.  Because these loans are issued at such a high interest rate and become payable after such a short period of time, most debtors find that they are seeking more check cashing loans to pay their previous ones off.

Can you face criminal charges for passing bad checks if you include your check cashing loans in your Chapter 7 or Chapter 13 bankruptcy?

Generally, the answer to this question is no.  When you post-date a check you are asserting that you don’t have sufficient funds in your account to pay on the check the day you actually write it, so both parties understand that there is a future intent to pay on the check rather than a present intent.  This however does not prevent the check cashing company from presenting the post-dated check for payment subsequent to filing your bankruptcy, but some courts have ordered that the company has to return the money to the debtor if the check is cashed.

If you have any questions as to whether or not your check cashing loans will be discharged in a bankruptcy please consult an experienced Columbus Bankruptcy Lawyer today.

 

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