Payday Loans Debt Consolidation

How To Write Payday Loan Debt Settlement Letters?

Before you start writing payday loan debt settlement letters to your creditors, you need to do some basic homework first. It is very important for you to keep in mind that your lenders are not legally obligated to accept any debt settlement proposal you make. There are in fact no specific laws regarding the same. Such deals usually work as part of mutual agreement. Therefore, the letters must be written in a way that should be able to convince the lenders that a settlement plan, as suggested by you, is in the best interest of both the parties. Following is a brief rundown on how to write the most convincing letters in this regard.

Review The Statute Of Limitations

There is no need to write payday loan debt settlement letters if the statute of limitations applicable to your debts has already expired. Depending upon the state you are residing in, the statute of limitations can be anywhere between one to five years from the date when the last payment was made toward your debts. For example, if you made the last payment on a payday loan account 15 months back and the statute of limitations is one year only, it means you do not legally owe the debts anymore. In fact, even if you know that the statute of limitations has not yet expired, you are still advised to challenge the debts. The burden of proof is on the lenders; the court will ask them to prove that you still owe the debts to them. Since payday lenders usually tend to avoid the legal complexities, this is likely to work in your favor, as they might then be willing to work on an affordable repayment plan.

Violation Of Laws

Knowledge and awareness about the payday loan laws applicable in your state will also prove to be very handy for you when it comes to writing payday loan debt settlement letters. Review the loan agreements again to find out if the lenders are violating any laws. If yes, you will have to mention the same in your letter. Some of the major points you have to review include the maximum amount of payday loan per account allowed in your state, the maximum legal limit for the rate of interest, number of rollovers permitted, the maximum legal limit on collection fees, how many times NSF fee can be charged, and whether the laws have made an affordable repayment plan mandatory for payday lenders. Reviewing all these factors will definitely show you the way on how to prepare a settlement proposal that your lenders will accept.

The Maximum Amount Of Money You Can Afford To Pay Every Month

Once you have worked on the above points, the next thing you have to do while writing payday loan debt settlement letters is to do a thorough calculation about your regular monthly income and expenses and find out how much money you can practically afford to contribute every month to settle your debts. If you are going through certain hardship, such as job loss, severe illness (and thus wage loss), or other such things, you may like to figure out how much you are capable to pay in one lump sum as full and final settlement of your debts.

If you are not confident enough that you can write payday loan debt settlement letters yourself, you always have an option to get assistance from professional credit counselors or payday debt settlement companies.

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