JAMES J. ROBINSON, Bankruptcy Judge.
The above mentioned instance came ahead of the Court regarding https://badcreditloansadvisor.com/payday-loans-sd/ the defendant’s motion for summary judgment filed on August 1, 2006, in reaction towards the debtor-plaintiff’s complaint alleging the creditor-defendant violated the stay that is automatic.e. 11 U.S.C. В§ 362(a)] by cashing the plaintiff’s check after she filed a petition for relief under Chapter 13 for the U.S. Bankruptcy Code. The defendant avers it failed to break the automated stay because associated with the exclusion supplied in 11 U.S.C. В§ 362(b)(11). The Court has jurisdiction over this matter pursuant to 28 U.S.C. В§В§ 157 and 1334. The Court heard dental arguments on September 12, 2006 and directed the events to register extra briefs coping with whether or not the check at issue qualified as an instrument that is negotiable. For the reasons stated below, the Court discovers the movement for summary judgment is born to be PROVIDED.
On April 15, 2006, the plaintiff received a loan that is”payday for $500.00 through the defendant. In return for the $500.00 loan, the plaintiff gave the defendant a check for $587.50, which was intended to pay the principal of the interest plus loan and charges. The defendant consented to keep the check until April 29, 2006. May 9, 2006, the debtor-plaintiff filed for Chapter 13 bankruptcy relief. For purposes with this summary judgment, the defendant stipulates it received notice regarding the plaintiff’s bankruptcy before negotiating her check always. May 16, 2006, the defendant presented the plaintiff’s search for re re payment, however it ended up being rreturned because of inadequate funds. Even though the check had not been compensated, the plaintiff did incur NSF charges imposed by her bank for issuing a check that is insufficient. On June 1, 2006, the plaintiff initiated this adversary proceeding for breach of this automated stay.
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The defendant contends that due to the fact check ended up being a negotiable instrument, depositing and presenting it for re payment had not been a breach associated with the automatic stay pursuant into the exemption supplied in Section 362(b)(11) of this Bankruptcy Code. The defendant cites different instances when courts have determined presentment of a negotiable tool isn’t a breach associated with the automatic stay. For instance, in Thomas v. cash Mart Fin. Serv., Inc. (In re Thomas), the Eighth Circuit discovered Money Mart, the creditor in a loan that is payday, had been particularly excepted through the stay whenever it attempted to obtain re payment on checks by tendering them into the drawee bank. 428 F.3d 735 (8 th Cir. 2005). The defendant contends checks for payday loans are “negotiable instruments” as defined by situation law. See Franklin v. Qwick Cash of Martin (In re Franklin), 254 B.R. 718, 720 (Bankr. W.D. Tenn. 2000) (cash loan company deferred presentment of plaintiff’s check, while the court discovered such presentment regarding the instrument that is negotiable the petition date had not been a breach associated with automatic stay);see also In re Noffsinger, 316 B.R. 283 (Bankr. W.D. Ky. 2004) (the court discovered presentment of debtor’s 19 checks fell in the concept of negotiable tool, plus the simple language of this automated stay statute managed, exempting the creditor through the automated stay; but, the creditor in this instance had not been a money advance/payday loan creditor).
On the other hand, the plaintiff’s brief in opposition into the defendant’s movement for summary judgment contends the wage advance deal between your plaintiff and defendant didn’t produce a negotiable tool as exempted by Section 362(b)(11). She contends the Court must not turn to Title 7, Article 3 of Alabama’s Commercial Code to find out if the check is an instrument that is negotiable but instead the Court should depend on Title 5, Chapter 18A of this Alabama Code, which offers the Deferred Presentment Services Act. The plaintiff contends Alabama legislation doesn’t recognize the check presented by the plaintiff to your defendant as being a negotiable tool but instead should be thought about as an element of that loan contract underneath the Deferred Presentment Act. Hence, the plaintiff asserts the Thomas choice is inapplicable in Alabama as it ended up being determined under Missouri law, which won’t have a Deferred Presentment Act, and since the Thomas situation ended up being decided just before Alabama’s enactment of their Deferred Presentment Act.
The Bankruptcy Code will not determine “negotiable tool.” Nevertheless, area 7-3-104(a) of this Alabama Code, describes a negotiable instrument as:
[A]n unconditional promise or purchase to spend a set sum of money, with or without interest or any other costs described within the vow or purchase, if it: (1) is payable to bearer or to purchase at that time it really is issued or first has control of the owner;
(2) is payable on need or at a definite time; and (3) doesn’t state any kind of undertaking or instruction by the individual guaranteeing or ordering re payment to accomplish any work besides the re re payment of cash. . . .