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Will My Tribal Payday Loans Recognize My Chapter 7 Bankruptcy? – Alice

“Dear Steve,

Just filed chapter 7 bankruptcy after years of struggling and I have 2 internet tribal loans.

I currently have 2 internet loans – Great Plains & Plain Green. I have had multiple instances of these loans over the last couple years & paid all of them back in full & on time. And I have been paying on these since last August & November so in reality they have their principal plus more paid back by now.

However, I just filed for Chapter 7 bankruptcy as I was not able to get caught up. My Q is do you know if these tribal loans recognize chapter 7 and allow a discharge without creating a huge hassle?

My lawyer said to put a stop ACH at my credit union right away to be sure. But he is not familiar with the tribal laws for these kind of loans.

I am just worried they have some kind of law against bankruptcy even though I could not see anything that says as such in the paperwork or on their website.

All other creditors I’ve called were pleasant and agreed they would immediately stop all ACH debits but I am unsure about the tribal loans.

Thank you!


Dear Alice,

That is an excellent question.

Sierra Exif JPEGThere has been some controversy surrounding these loans. It is unclear what law these tribal payday loans operate under. The tribes say they are exempt from state law because they operate under their own tribal law.

In that case it sure seems they would be hard pressed to move forward with a claim against you in your state. The Consumer Financial Protection Bureau has recently become involved in this area.

I am not familiar with a consumer that had tribal payday loan, who filed bankruptcy, and was chased afterwards for the debt. But I would not be surprised if the tribal payday lenders tried to push you for payment after your discharge but that doesn’t mean you are obligated to pay.

The bottom line is you should include these tribal payday loans in your bankruptcy and if they hire a collection company to come after you later, the collection company will be most likely subject to the Fair Debt Collection Practices Act and you can take action against them for collection abuse.

One of the first cases brought by The Federal Trade Commission against tribal payday lenders is still working its way slowly through court. The FTC filed an amended complaint on April 12, 2013 in this case against a whole host of Defendants. – Source

If you have already filed it would make sense to put a stop payment on those tribal payday loans.

Please post your responses and follow-up messages to me on this in the comments section below.

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About Steve Rhode

Steve Rhode
Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.
  • Michelle Mathews

    I had a call yesterday from someone claiming to be an attorney for the tribal pay day loans they claim I signed an electronic contract making them exempt if I ever filed bankruptcy which I’m getting ready to do

    • Steve Rhode

      It is an evolving subject that has yet to be resolved yet states have asserted the agreements are void.

      Just don’t go to the reservation and you won’t be subject to tribal law.

  • Alice

    Update – my credit union has put a stop on the 2 loans which may try to come thru ACH tomorrow. They assured me they would send them back as unauthorized so now I will see what actions, if any, they take. They may recognize the chapter 7, they may try different tactics to collect (threats, harassment, etc) or they may sell the loans to a 2nd party collection agency, who will be bound by US laws. I will send another followup to let people know what my experience was with internet tribal loans & bankruptcy.

    • Selena N Tommy Evans

      i just realized i was in a payday loan with them..not realizing they were just renewing my loan instead of paying it off…so upset ..paid 500 already an they say i owe them 675 ahhhhhhhhhhh

  • Adam Garcia

    Interesting post. I have not come across a tribal payday loan, but I agree with your advice.

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