As a bankruptcy attorney in Mount Vernon, IL for over 20 years, I read through and analyze court rulings throughout the country, as they may be a harbinger of things to come in districts in which I practice and can be used to help Debtors get the financial relief they need.
Here is an interesting case concerning a cash advance store and their standing as a creditor, which part of the code applies to them, etc. It is also a good case about preparedness and good trial advocacy.
The text of the Americash v Marquardt & McCool and Jones case is a long but very interesting read. I reprinted it here. If you have not read it yet, click on the hyperlink to review it.
There is a lot an attorney can learn from this case. It coming from the Central District of Illinois (basically the middle of the state), it will be reviewed more closely in the Southern District of Illinois (in which I practice), than a case from another state, for example.
There are a few points to be learned from this case:
Most obviously, do not go out and get a loan just before filing bankruptcy. A bankruptcy attorney will advise this from the outset; it just makes sense.
This case finds that these payday lenders are not open-ended loans and are not subject to a Motion for Discharge through 523(a)(2)(C)(II), but still through the general provisions of fraud under 523(a)(2)(A)
Or it can be if the Attorney and the Creditor are prepared. Not bringing in the loan officer for the debt was an error here. Ms. Ferguson was not the face-to-face loan representative. Additionally, he could not explain how these kinds of companies, who routinely give loans to lower income customers, rely on the Debtor’s representations.
Another error, and one that will be hard to avoid in the future, is that they did not prove reliance. It is hard for these kinds of companies to show reliance – particularly if they get their own credit report as part of the loan process. I have also successfully defended these kinds of actions of those grounds – If their credit report shows a debt, a lender should not be angry that the debt was left off the application. If leaving off the debt was so offensive to them, they should not have given out the loan!
This will prove to be a useful case throughout Illinois Districts as it is a very well thought-out decision. Debtor’s attorneys will find the discussion of the case useful if they face an adversary proceeding challenging the dischargeability of a payday loan debt.
About the author: Michael Curry of Curry Law Office in Mount Vernon, Illinois has helped thousands of individuals, family and small businesses in southern Illinois find protection under the Bankruptcy Code for almost twenty-five years. He is also available to help individuals and families with their estate planning (wills, power-of-attorney) and real estate and other sales transactions.
He is also the author of books on finance and bankruptcy available on Kindle through Amazon!
Whether you live in Mount Vernon, Salem, Waltonville, Woodlawn, Lawrenceville, Centralia, Louisville, Xenia, Grayville, Effingham, Dieterich, Vandalia, McLeansboro, Dahlgren, Albion, Flora, Clay City, Kinmundy, Chester, Sparta, Olney, Mount Carmel, Nashville, Fairfield, Cisne, Wayne City, Carmi, Grayville, or anywhere in Southern Illinois call Curry Law Office today at (618) 246-0993 and Finally Be Financially Free!