[xinspear]

My friend has a gambling problem. He owes multiple payday loans. He claim he owes $25,000 in principle. I saw one of this payday loans, it was $970 and he incurred a $190 extension fee in 2 weeks. He currently has an outstanding balance of over $44,000 from his friends and families. I personally lend him $10,000 which was suppose to pay off his payday loans 3 months ago. Now he is asking his sister for $25,000 saying that will fix the problem. We are thinking of letting him default on his loans, but wanted to know what will happen he did this.

Here are a few facts:

This is regarding California US.

A. His spouse doesn't know of his debt.
B. They own a property, I think there is very little equity in it atm.
C. Some of the payday loans are breaking the law, one was charging more than $17.5 per 100 over a 2 week period. Another lent him more than $300 legal California max.
D. Both resident currently has their name on the deed to the house, but only the non debt burden member has their name on the mortgage.
E. California is a community property state.

Questions:

What happen when my friend defaults on his loan?
What type of judgement would be place, as some of the loan are non California law compliant?
Does his spouse has her wage also garnish in the event of bankruptcy by the other member?
Does the house get foreclosed? The debt burden member only has his name on the deed, but not on mortgage,
What type of repayment in principle and interest would a judgement be?
What is the max wage garnishment for each spouse?
Does each debtor get their own judgement after he files for bankruptcy protection?

Thanks in advance.

[warriorfan707]

Im going to go out on a limb and say I think your friend is you.

[TR88]

Im going to go out on a limb and say I think your friend is you.

[Grits n' Gravy]

Message forum heavyweight, ttwarrior. He is an expert at debt resolution and litigation.

[xinspear]

Ok, say I am my friend. It doesn't change the facts.

[xinspear]

Cool learn something new from my research, most of his payday loans are illegal. They overcharge the legal california amount of interest, and he only needs to pay back the principle.

[The Kraken]

Everything you read will be speculation. Go see a bankruptcy lawyer. He'll be able to answer the questions with some degree of clarity. The questions you asked are dependant on a lot of different variables therefore all you'll end up with here are differing opinions without a clear concensus.

[ericthegangster]

What happen when my friend defaults on his loan?
The payday lender sues you and puts a lein on you and your wife's assets including your house and future wages.

What type of judgement would be place, as some of the loan are non California law compliant?
I am not sure about this but you will still be on the hook for the principal amount at a minimum.

Does his spouse has her wage also garnish in the event of bankruptcy by the other member?
Yes. As a married couple your assets and liabilities are viewed as one in the same.

Does the house get foreclosed?
The house can only be foreclosed by the bank that holds your mortgage, but they will go after the equity that you have built up in the house. Most likely you will not be able to afford your payment anyways and the bank will try to get you to perform a short sale so they can recover their principle.


The debt burden member only has his name on the deed, but not on mortgage, What type of repayment in principle and interest would a judgement be?
Not sure but it sounds like you are ****** bud!!

What is the max wage garnishment for each spouse? Does each debtor get their own judgement after he files for bankruptcy protection?
Probably something like 20% of your wages will be garnished, unless jointly you are making a whole bunch of money. The law will leave you with enough to get by, but not much more...

[Plus573]

You, I mean "your friend", should get a lawyer that specializes in this type of law. Don't mooch off your sister and stop getting yourself in more debt. You are gonna end up screwing your wife and destroying your marriage.

[ericthegangster]

xinspear, send me your points for helping you out pal

press the little gold coin with the plus sign in the bottom left of this message. type 14 and then click send. thanks pal!

good luck.

[High3rEl3m3nt]

Eric is right...in Utah, loan places have completely bogged down the legal system because it's a never ending revolving door with all their lawsuits...like traffic court here.

[HeeeHAWWWW]

Cool learn something new from my research, most of his payday loans are illegal. They overcharge the legal california amount of interest, and he only needs to pay back the principle.

All very nice in theory, but not much use when they send the "boys" round to collect.

[Djstucky]

Eric is right...in Utah, loan places have completely bogged down the legal system because it's a never ending revolving door with all their lawsuits...like traffic court here.

Actually people not repaying debt/loans is what bogs down the court and causes this revolving door...not too many people who fulfill their contractual agreements get pursued in the court of law...

[ericthegangster]

Actually people not repaying debt/loans is what bogs down the court and causes this revolving door...not too many people who fulfill their contractual agreements get pursued in the court of law...

The payday loans charge ridiculous interest as a result of the high default rate. It is inherent in their business. The only reason someone would go to a payday lender in the first place is because they are so buried no one else will loan to them.

It's a problem with the the game, not the players....

[SteveRyan]

What happen when my friend defaults on his loan?
What type of judgement would be place, as some of the loan are non California law compliant?
Does his spouse has her wage also garnish in the event of bankruptcy by the other member?
Does the house get foreclosed? The debt burden member only has his name on the deed, but not on mortgage,
What type of repayment in principle and interest would a judgement be?
What is the max wage garnishment for each spouse?
Does each debtor get their own judgement after he files for bankruptcy protection?

Thanks in advance.

What happen when my friend defaults on his loan?
What type of judgement would be place, as some of the loan are non California law compliant?
If your friend defaults on the payday loans, the debts end up in collections. Eventually, they will take him to court. He would need to prove in court that they were not in compliance with California laws. If he is correct, the judge will adjust the amount owed. At this point, the creditor may file a motion to have wages garnished as this is legal in California. They may offer a payment plan....probably not.

Does his spouse has her wage also garnish in the event of bankruptcy by the other member?
Part of the purpose of Bankruptcy is to prevent wage garnishment. Your friend will have to file Chapter 13 unless he has been making solid payments on his debts over a long period. California allows married couples to file bankruptcy together or separately. This means that she can protect her credit while he goes through bankruptcy.

Does the house get foreclosed? The debt burden member only has his name on the deed, but not on mortgage,
What type of repayment in principle and interest would a judgement be?
I don't know.

What is the max wage garnishment for each spouse?
Since she can leave herself out of the picture, only he gets garnished. Probably 25%.

[High3rEl3m3nt]

DJ, you are right in a sense. People make the decision and I am a big believer in personal choice. Though, these places are predatory and are willing...no wanting to loan money to people they know are high risk, they are not forcing people to keep them in business. They do expect people not to repay them and that is the reason why these cases are working the Utah legal system full time.

[High3rEl3m3nt]

these loans don't even go to collections...they're not messing around. They are going to wait until the interest really accrues and then they'll pursue legal action. This is not the same as C C debt...these guys are going to cut right to the point.

[ericthegangster]

What happen when my friend defaults on his loan? What type of judgement would be place, as some of the loan are non California law compliant? If your friend defaults on the payday loans, the debts end up in collections. Eventually, they will take him to court. He would need to prove in court that they were not in compliance with California laws. If he is correct, the judge will adjust the amount owed. At this point, the creditor may file a motion to have wages garnished as this is legal in California. They may offer a payment plan....probably not. Does his spouse has her wage also garnish in the event of bankruptcy by the other member? Part of the purpose of Bankruptcy is to prevent wage garnishment. Your friend will have to file Chapter 13 unless he has been making solid payments on his debts over a long period. California allows married couples to file bankruptcy together or separately. This means that she can protect her credit while he goes through bankruptcy. Does the house get foreclosed? The debt burden member only has his name on the deed, but not on mortgage, What type of repayment in principle and interest would a judgement be? I don't know. What is the max wage garnishment for each spouse? Since she can leave herself out of the picture, only he gets garnished. Probably 25%.

They allow you to file bankruptcy separate in Cali? I'm going to have to move out there if I'm ever barrelled in.

[andywend]

The payday loans charge ridiculous interest as a result of the high default rate. It is inherent in their business. The only reason someone would go to a payday lender in the first place is because they are so buried no one else will loan to them. It's a problem with the the game, not the players....

The payday loan companies charge a very reasonable rate of interest considering the circumstances of the people they deal with and the time duration of the loans.

For example, lets say one payday loan center charges 200% annual interest. Seems like a lot? Well it isn't.

Lets say you lend out $250 payable back in 2 weeks at an annual interest rate of 200%. The interest on this loan amounts to a grand total of $19.18 for the 2 weeks. Now let me ask you a question:

How many deadbeats would you lend $250 of your hard earned money knowing the best case scenario is you get $269.18 at the end of the 2 week period. When you factor in the expenses of running the business along with the incredibly high default rate, its easy to see that making a profit even with the absurd interest rates isn't that easy.

The only thing the federal/state governments are going to accomplish with all of their B.S. regulations is to take away the only avenue these people have of getting money that they need before payday and no I do NOT own a PayDay Loan Center type of business.

[SteveRyan]

They allow you to file bankruptcy separate in Cali? I'm going to have to move out there if I'm ever barrelled in.

Yep.

Married, filing jointly.
Married, not filing jointly.

[ericthegangster]

I've seen payday loan APY of up to 800% before. 200% interest is a steal in this industry. The bottom line is that these people probably shouldnt be getting loans at all if the interest is that high...

The government would actually SAVE money by helping these folks out instead of wasting all the time/money on civil courts with payday loan cases....

[ericthegangster]

I am pretty sure the creditors could still go after the other spouse if only one files for bankruptcy... In marriage all assets and liabilities are one in the same.

[andywend]

I've seen payday loan APY of up to 800% before. 200% interest is a steal in this industry. The bottom line is that these people probably shouldnt be getting loans at all if the interest is that high...

The government would actually SAVE money by helping these folks out instead of wasting all the time/money on civil courts with payday loan cases....

The point I was trying to make is that expressing the interest rate in annual terms is ludicrous when you're talking about 1 to 2 week loans and the last thing this country needs is federal and state governments becoming MORE INVOLVED in the lives of people and businesses.

[SteveRyan]

I am pretty sure the creditors could still go after the other spouse if only one files for bankruptcy... In marriage all assets and liabilities are one in the same.

Ahh...I see what your saying.

I did a little Googling and it seems that if the debt is a necessary thing (Like a medical bill), then they can come after the spouse.

But for a payday loan?? I doubt it.

[ericthegangster]

[FONT=verdana] The point I was trying to make is that expressing the interest rate in annual terms is ludicrous when you're talking about 1 to 2 week loans and the last thing this country needs is federal and state governments becoming MORE INVOLVED in the lives of people and businesses.

I'm not saying its ideal but it would probably be cheaper than the court costs for all the payday loan defaults. If I have to choose between having someone else cut off my hand or I cut off one finger myself, I choose cutting off the finger myself instead of losing a hand to have someone else do the work.

[xinspear]

I've seen payday loan APY of up to 800% before. 200% interest is a steal in this industry. The bottom line is that these people probably shouldnt be getting loans at all if the interest is that high...

The government would actually SAVE money by helping these folks out instead of wasting all the time/money on civil courts with payday loan cases....

Sorry bro, they only let you send 2 point a day as non member.

[ericthegangster]

Ahh...I see what your saying. I did a little Googling and it seems that if the debt is a necessary thing (Like a medical bill), then they can come after the spouse. But for a payday loan?? I doubt it.

So why doesn't everyone get payday loans to cover their medical bills and then have only one spouse go bankrupt for the payday loan instead of the medical bill?

[ericthegangster]

Sorry bro, they only let you send 2 point a day as non member.

Ty xinspear

[darkhat]

Im going to go out on a limb and say I think your friend is you.

[WvGambler]

I love threads like these. Make me remember that I am a good father and spouse.

[Business3587]

Cool learn something new from my research, most of his payday loans are illegal. They overcharge the legal california amount of interest, and he only needs to pay back the principle.

There are a lot of different ins and outs when it comes to "usury". Better be very sure before you go accusing a business of Usury.

[Smoke]

I love threads like these. Make me remember that I am a good father and spouse.

[thetrinity]

pics or it never happened.

[EddieMush]

I have a much simpler solution

Did you ever see "it's a wonderful life" ?

Have your " friend" do what George Bailey was going to do, only hope Clarence isnt around

His family will be better off

[xinspear]

I have a much simpler solution

Did you ever see "it's a wonderful life" ?

Have your " friend" do what George Bailey was going to do, only hope Clarence isnt around

His family will be better off

Uh no, I will still be in the hole for $16000. Man lending money to gambler is worst than buying the Lotto. At least one you have a chance for striking it big.