Payday Loan Scams And Bankruptcy - Westgate Law

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Payday Loan Scams And Bankruptcy

Payday loan scams can happen both during bankruptcy and post-bankruptcy. They have become a problem over the last few years as they can get pretty nasty and very scary. Luckily, if you know what to look for, they are easy to recognize.

The Payday Loan Scam:

  1. You have a payday loan or collection account either listed in your bankruptcy petition or already discharged through a past bankruptcy.
  2. You get a call regarding this “debt” from someone who says that they are with the Sheriff’s Department or the FBI. They typically say they are on their way to your home to arrest you or that you have committed bank fraud and you’re going to be charged and arrested and then go to prison. They’re trying to scare you.
  3. Their entire purpose is to get you scared so that you’ll respond to their next demand – to avoid the repercussions they threatened you with by paying on the account. (The same account that was either already eliminated through your bankruptcy discharge or will soon be eliminated through a bankruptcy in process).

These phone calls can be very scary. They may even call your employer if they have gained access to that information. They may talk to your employer first insisting that they’ve hired a deadbeat or even a criminal. Then they’ll get you on the phone and if you don’t know what to expect, you may not know how to respond. They may even get you believing that there is truth in their threats and accusations.

The only way to deal with this type of scam is to remain firm and strong. Clearly state that you have eliminated (or will soon eliminate) your debt through bankruptcy. Advise them that you are aware that they are running a scam and that you know that your debt has been or will soon be eliminated through your bankruptcy. Tell them that you know that you’ve done nothing wrong. Tell them that they are welcome to call you again the next day as you know that they are actually a criminal and that you know they run this scam for a living. Advise them plainly that they are welcome to call you again, but that you’re not going to pay them. Hopefully, by advising them that you know what they are doing, they’ll leave you alone and move on to the next poor, unsuspecting person on their list.

Dealing with scams like this can be horrible, but being clear with the person running the scam is the best way to get them to leave you alone. Just make sure that they know that they aren’t going to scare you and you aren’t going to pay; even if they call your family or your boss. If it becomes necessary, simply advise them that you don’t know the person that is calling you and that they’ve obviously obtained your information fraudulently and are using it to attempt to scam you into paying them.

If you find yourself in this situation, remember to be solid and firm. For additional advice on dealing with Southern California bankruptcy and other issues that arise post-bankruptcy, contact the experts at Westgate Law.

About the Author

Justin Harelik

Justin has a singular goal: to get people out of financial distress and move them to financial stability and prosperity. He does this by combining 15 years of in-depth experience in bankruptcy, credit management, debt negotiation and student loan modifications, and he does it with both English and Spanish-speaking clients.

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