2011/06/25

Are You Aware Of These Payday Loan Debt Settlement Laws?

If you are considering signing up with a debt solution company to settle your payday debts, you are strongly recommended to get yourself educated on the payday loan debt settlement laws that regulate these types of services. There are many companies in the market that offer debt relief solutions to people who are struggling with mounting payday debts; they usually negotiate with your lenders on your behalf and try to convince them to accept a settlement plan that you can easily afford depending upon the specific financial situation you are in. But, there are several unscrupulous companies also that are in this business just to make money from you. In order to protect yourself from scams, you must be well aware of the US laws regarding this. Following is a brief rundown on it.

The Payday Debt Settlement Companies Must Not Mislead Or

Misinform You

The payday loan debt settlement laws in the United States of America have provide you the legal right not to be misguided by such companies. If a company misleads you, it will be treated as a criminal offence and you can even file a lawsuit against them. In general, you are advised to be wary of all those companies who claim to bring an instant solution to your debt problems, such as within a day. It is very important for you to understand that debt settlement is a long process and it takes time. Lots of meetings take place between the company and your lenders. In fact, in most cases, even a debt settlement requires you to pay back the restructured debts in small monthly installments over certain number of months. These companies do not have any magic wand and you cannot expect them to help you wipe out all your debts in a flash.

Cease And Desist Law

The payday loan debt settlement laws have issued specific instructions for lenders and debt collectors as well. For example, even if you fail to make the repayment as part of the debt settlement plan, your lenders or debt collectors do not have the right to cease your property or sell some of your assets forcibly to get their money back. Such activities are illegal and are rated as a crime. You can inform the police in such cases and get help from them. Besides that, you can also file criminal lawsuits against the culprits. Always remember, inability to repay a debt is not a crime and you have the rights not be harassed in any manner by debt collectors.

Likewise, payday loan debt settlement laws also prohibit debt settlement companies and your lenders from using wage garnishment as an option. Wage garnishment can happen only in a situation where the court has issued an order regarding the same.

Filed under Payday Loan Laws