Posts Tagged ‘horrible payday loan debt trap’

Three Things You Must Do To Get Out Of Horrible Payday Loan Debt Trap

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If you have caught yourself into a horrible payday loan debt trap, you do not have to consider it as a hopeless situation. You just have to keep your focus on the possible solutions and

you can definitely come out of it. Following are four steps, which if you implement thoroughly, can help you get a better control of your debt situation, which will eventually show you the pathway on how to pay it off as quickly as possible.

Do Not Borrow A New Cash Advance

Many people borrow another payday loan in order to make the repayment on an existing short-term cash advance. This is the worst financial move a person can ever make. Though you may be able to get some temporary relief, but the next month, you will find yourself in a much larger debt trap. These types of loans are very expensive and you must avoid borrowing it at all cost. When you know that these loans are responsible for the trap you are already in, it does not make sense to make the same mistake again.

Negotiate An Installment Plan With The Lender

Many states have now introduced several laws to protect the rights and interests of consumers. For example, most of them have now made the automatic renewal of these loans illegal. It means if you do not make the repayment in time, your loan account should go into collections. Besides that, some states also require the lenders to arrange an affordable repayment plan (in small monthly installments) for the borrowers so that they can easily pay off their debts. Therefore, you are recommended to contact your creditor and negotiate an installment plan. The states that have made it mandatory for the lenders to provide this convenience to borrowers include Washington, Oklahoma, Nevada, Michigan, Illinois, Florida, Alaska, and Alabama. If you are living in one of these states and the lending company refuses to work out such an arrangement, you can file a complaint with the state regulators.

Stop Lenders From Withdrawing Money Directly From Your Checking Bank Account

If you are in a horrible payday loan debt trap, things can become much more complex if your lender keeps on withdrawing money directly from your checking bank account as soon as you get your paycheck. Many consumers simply sit back and keep watching their hard-earned monthly salaries going into the lender’s pocket. They do this because they are not aware of the Credit Practices Rule created by the Federal Trade Commission. As per this rule, it is illegal to include mandatory wage assignments in the loan agreement. Therefore, this is the time to read your loan contract once again. If you find a voluntary wage assignment clause in the agreement, write a letter to the lender and ask them to revoke that clause. Once that clause is revoked, the lenders will not be able to take money directly from your paycheck. If they refuse to revoke that clause, you can file a complaint with the Federal Trade Commission. Besides that, you must also notify your bank about it.

These three steps will give you enough control on your situation and you will be able to work out an alternative plan to get rid of the horrible payday loan debt trap you are currently in. You are advised to look into the “” section to find out several effective ways on how to pay off the mounting debts caused by risky short-term cash payday advances.

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