Payday Loans Debt Consolidation

Dealing With Payday Loan Debt Collectors – Know Your Legal Rights

Unless you are well aware of the legal rights and options that the laws in your state have provided to you, it will not be an easy to task to deal with payday loan debt collectors. They are known to be the worst debt collectors in the US, probably after IRS :) . First of all, it is very important for you to keep in mind that the Fair Debt Collection Practices Act is applicable in every state, which means you have the right not to be harassed. However, almost every state has also introduced specific laws regarding the collection of payday debt. Make sure that you are well aware of those laws. The problem with payday loans is that they are easy to get but are often very difficult to repay. The chances of you missing the payments are very high because of the reasons like extremely high rate of interest, hefty finance charges, and very short repayment period. Besides that, you can be in big trouble if you are hit again with another emergency, which will encourage you to borrow another cash advance. The worst thing that many people do is that they borrow another payday loan to pay off a previous one from the proceeds thus received. Such activities open the doors of financial nightmare, coming out of which often sounds like an unrealistic dream. Following are a few simple tips that you will find useful in managing payday debt and in dealing with debt collectors.

Find Out If Your Lenders Are Violating Laws

When it comes to dealing with payday loan debt collectors, the first thing you have to do is to find out if your lenders are following the payday loan laws applicable in your state. If you find that they are violating some of the laws, you should immediately file a complaint with the state authority. Almost every state has certain collection laws for payday debts. For example, many unscrupulous payday lenders keep sending the same check for collection again and again and when it returns because of insufficient fund in the borrower’s bank account, they take it as an opportunity to charge a hefty NSF (non-sufficient) fee to the loan account. This practice is illegal in the majority of states, as most of them permit for just one time (or in some states, two times) NSF fee up to a certain amount only.

Criminal Lawsuits Cannot Be Placed Against You

In most states, it is illegal for payday loan debt collectors to threaten you that they will send you to jail because you are not repaying the payday loans. Non-payment of payday debt is not considered as a criminal offence in majority of the states in the United States of America. However, debt collectors or lenders can file civil lawsuit against the debtors.

Try To Negotiate A Repayment Plan

If the loans are legitimate and everything is as per the laws, the best defense is to face the debt collectors and talk to them about an affordable repayment plan. They only want their money back. And, it is very much likely that they will agree to a repayment plan that is convenient and affordable to you. Here, it is very important for you to keep in mind that many states have made it mandatory for the payday lenders to offer debtors an affordable repayment plan in small installments over an extended period of time. If you are not aware of those laws, check the relevant sections on our website for more information about the same.

Overall, if you keep in mind the above things and follow a course of actions accordingly, dealing with payday loan debt collectors should not be a very harassing or difficult task. You just have to be wise, very careful, and very informative in your approach.

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Posted in Payday Loan Laws, Payday Loans Debt Consolidation | 1 Comment »

One Response to “Dealing With Payday Loan Debt Collectors – Know Your Legal Rights”

  1. Martin says:

    An informative article on the consumer rights in case of inability to pay short term cash loans. It has been seen to be a difficult position to tackle with different collection agents. As per the prevailing laws you can not be exploited by any collection agent or their representative. It has been quiet an easy job to get these loans but it become difficult to repay due to their high rate of interest , and a very short span of time to pay off. Many times it is quiet possible that you shall be in requirement of more loans in the mean time and this will bring a heavy burden on you , so you should be well aware of all the laws. Make sure that your financial lenders are strictly following the existing state laws and if you found them not following the regulations you should immediately file a case against them. Inability to repay in time is not an criminal offense and you can not be prosecuted in the criminal court , only a civil case can be filed against you. It would be better to negotiate with your lenders on a suitable repayment plan.

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