the payday lender redeposited a check I gave them for a payday loan almost 60 days after 341 hearing and it was paid by the bank. You suggested to ask them to return the money but they said they would not. I informed the attorney who filed my case. His office suggested to send them a cease and desist letter which is not helpful once the money is taken. The attorney office told me I then would need to take them to small claims court and they could not help me with that. Now I am still not sure whether I could pursue them or not. I have been borrowing and paying them for 6 month prior to filing. Now I am past the 90 days post 341. Would you please help me understand my options. I mentioned conflicting as some attorneys said I could get damages some said I could not.
You have probably received different answers because section 362(b)(11) of the Bankruptcy Code provides:
The filing of a petition under section 301, 302, or 303 of this title, or of an application under section 5(a)(3) of the Securities Investor Protection Act of 1970, does not operate as a stay--
under subsection (a) of this section, of the presentment of a negotiable instrument and the giving of notice of and protesting dishonor of such an instrument;
In Eastern District of MO, where I practice, the check holder might present the check until the termination of the automatic stay by the entry of the order of discharge.
The reason you are getting different answers is because the issue doesn't result in a lot of written court cases. Simply started, litigation costs money and not everyone who files a bankruptcy case has money to pay for litigation.
Your situation is a Catch-22: The lender is in possession of a post-dated check (negotiable instrument) that they can cash. However, the automatic stay prevents the lender from taking funds once the stay is in effect. So while there is case law saying that the lender can cash a post-dated check, there is also case law stating that they the funds have to be returned in light of the automatic stay---but you'll more than likely be stuck with any bank fees.
if you're case is still over, you can attempt to file a motion for turnover of post-petition property and a motion for violation of the automatic stay. You are liable to get a better/cheaper reception/response from your bankruptcy judge than a state court judge.
If you are interested in a more detailed legal analysis of your situation and reside in Illinois, contact 360 Legal toll-free at 855-360-4608 or at www.threesixtylegal.com. I am only licensed in the state of Illinois. This is only my general observation about the law and my experiences as a practicing attorney. This is not legal advice and should not be construed as legal advice. This does not create an attorney client relationship. If you wish to obtain legal advice or create an attorney-client relationship, then you should directly contact a lawyer licensed in your state who you believe possesses the knowledge and experience to assist you with your case.