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Bankruptcy and Payday Advance Loans. 18 Aug Bankruptcy and Payday Advance Loans. Payday advance loans and payday lenders have an image problem, and in some states, payday loans for no credit legal problemthey arent. Legal, that is. Recent federal law caps the interest rates they can charge military personnel. Many states specifically regulate payday lenders; some outlaw them altogether. Others regulate interest rates, or have general regulations regarding taking a post-dated check, and the length of time a check can be held.
But in states where such loans are legal, and largely unregulated, (like South Carolina) payday lenders are thriving, and they are an issue in many bankruptcy cases.
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