How to Legally Get Out of Payday debt

When finding your way out of debt seems like an impossible task just know that you aren’t alone.  There are approximately 11 million Americans who borrow money through payday loans every year.  Most fall into the trap of paying off one payday loan with another.  This is when your payday loan debt starts to get out of control and results in a crazy amount of money in fees for these loans.  With some dedication and self-control, there is a way out.  We know that being in debt can be overwhelming so here are steps you can take to legally get out of payday loan debt.

Did you ask “How did I get here?”

So, you needed money fast and walked in your payday loan company’s doors.  Did you find it easy to apply?  They make it as easy as possible because many times than not the borrower doesn’t have the money come the next pay period and takes another loan to pay the first which also acquires high loan fees.  It is easy for a borrower to receive the loan because all they need is an account at a bank and any kind of job.

Many borrowers have no choice but to take out a loan because their financial obligations outweigh their resources.  Desperation may come from not being able to put food on the table.  What happens most frequently that people do not read the small print and even when they do they don’t do the figures on how much interest will need to be paid if payments aren’t paid off by the first pay period when they are due.

 

The way the payday loans are structured, lenders hook you from the very beginning.  Here are some characteristics of what an actual payday loan is:

  • Short Term? No way! Maybe the companies manipulated into making you think that your loan is short term, easy to get, and easy to pay off but most borrowers end up in debt 6 months out of each passing year.
  • Huge Fees! Can you believe that loan fees are approximately 60 dollars for each loan period? This is where the numbers start to escalate.  If you didn’t have the money for the pay period chances are you don’t have it again the next period.  If most are in debt 6 months that year it may be time for you to crunch some numbers.  That totals $720 dollars in interest on a small loan around $400
  • What a horrible cycle! Without paying off the total loan 2 weeks after it is borrowed you will find yourself in the trap that the payday loan lenders want you in. It’s a large amount needed shortly after the loan was borrowed and the cycle keeps spinning every time you renew the initial loan.  75% of borrowers will pay off a loan and not even two weeks later take out another.  It’s like they didn’t learn their lesson the first time.

 

This is what happens when you don’t pay your debts.

Not only are high-interest fees and penalties something to worry about when you default on your payday loans, you are at risk if you choose the automatic debit option with your lender.  They can withdraw the money from the account number you provided them with and if the money isn’t in your account not only are you paying a large sum of money to repay your loan, you have now acquired bank fees and your bank account is at a negative balance.  This is where you find yourself not being able to pay for the necessities needed just to get through the day.  Electricity gets turned off, or maybe you can’t put food on your table, you no longer have money for childcare that is needed to go to work.

Great possibility of harassment from your lenders if you do not pay your debts.  They are relentless, shady, and many times very threatening.  They may call your family or your job which leads to embarrassment and shame.  They will threaten legal action and garnished wages to bully you into making the payment even when you don’t have the money to pay your obligations. These companies are known to even use illegal tactics to get you to pay.  These sharks can leave you awake at night with stress and worry about how you can get yourself out of the mess you are finding yourself in.

 

As unpleasant as all of this sounds do not give up yet, there is help out there for you.

So, how do you get out of this mess?

As we mentioned before, as scary as all of this is there is payday loan relief that can help you sleep at night, again.

 

A big factor to determine when trying to get payday loan relief is where exactly you borrowed the loan from.  State laws are different when it comes to these loans.  Colorado is a state that is looking to change the laws of payday loans to make it an easier process for the borrowers to pay back the loan in a much fairer way.  They are trying to eliminate the effects of penalties snowballing as quickly.  The state has put regulations on how many times a borrower can renew a loan, as well.  Some states have put regulations into effect that makes a lender offer an EPP, extended payment plan, which protects the borrower at the time of signing the loan.  This alleviates the possibility of high-interest fees.  We have listed below many ways to get yourself out of your payday loans legally.

EPPs: It is beneficial to the repayment of your loans if you are offered an EEP at the time of taking the first loan.  Not only does it protect you from having your debts be reported to the credit bureaus, you will have a little extra time to repay the loan.  The time that the Community Financial Services Association of America has implemented that the lenders of their group offer are an extra four periods until repayment defaults.

 

Tips for applying for an EEP:

  • Do it on time. Applying for your EEP must happen at least one day before the pay period comes up.
  • Be sure that a new agreement is signed every time. Whether it be online or at a specific location be sure you are aware of how to fill the form and what the proper procedure is to submit it

 

Payday Loan Relief: Maybe you’re in a state where an EEP is not an option for you and you have found yourself either close to defaulting or already have defaulted it is time to find some professional help to get you out of your payday loans.  Agencies that help with debt relief have the knowledge and expertise that a borrower may lack when legally attempting to diminish these debts.  Unfortunately for the borrower, as well as the agency, these loans come in all shapes and sizes and there is one specific way out.  These loans sometimes need to be navigated by someone who knows what they’re doing.  Within the debt relief industry, there are several options for debt relief.  We will explain them below.

 

  • Payday loan consolidation. If you have borrowed numerous loans a payday loan consolidation company may be a great option for you.  They can put your loans in one monthly payment you can afford and help lower your high-interest fees.  This helps you get out of your payday loan debt faster.
  • Payday loan settlement. Maybe payday loan consolidation isn’t an option for you but don’t lose hope.  A payday loan relief agency can negotiate with your lenders and offer settlement amounts to your lenders to help you in your dire situation.  If you have a large amount of money to throw at your debt your representative may be able to get your loan payment settled at a variable percentage of the total loan amount.  This gets you out of debt the quickest.

 

Bankruptcy: What a scary term for most and yet many Americans every year have to apply for bankruptcy because the debts have become irreparable.  This is a last-ditch effort to get yourself out of debt for good.  The biggest downside to bankruptcy is that your credit will be at it’s lowest it can possibly be, and it will take approximately 7 years or more to repair the damage that the bankruptcy has caused.  You won’t be able to the borrower from a lender for things such as car loans, mortgages, or any other loan for that matter.

Once you find yourself out of payday loan debt through whatever payday loan relief effort you choose to be sure to not acquire debts following your accounts all being at zero.  The goal was to get out of debt.  Now, why would you get back in?

 

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