Payday loan debt is a tough thing to live with. And for those in payday loan debt, it might seem impossible to become debt free and end the harassing phone calls, emails and letters. Being in payday loan debt means having to try to keep up with taking out new cash advances in order to make ends meet. But that only creates more of the same problem and that’s how lenders continue to make money. Eventually, borrowers in payday loan debt simply stop trying to keep up and go into collections. But what can payday lenders do to collect bad loans? The answer, frighteningly enough, is plenty.

Payday Loan Debt

Taking out cash advance loans means having to repay what you’ve borrowed and paying regular living expenses. Lenders structure their loan products for this very reason. They know borrowers will likely roll over or extend their loans, and that keeps the money coming in. Every time borrowers extend or roll over their loan, the lender collects more fees and the borrower doesn’t get any closer to paying off the principal or interest.

In some instances, borrowers actually take out new loans in an attempt to bundle their old loans and start over. But all this starts over is another round of payday loan debt.

Payday Loan Collection Options

Under federal and state laws, payday lenders can use several methods to collect on bad loans. Of course, the first thing that will happen is the borrower’s account will be sent to collections. And that begins a barrage of phone calls, emails and letters. Not only will the collectors phone the borrower, but anyone listed as a reference on the cash advance application.

If the collection attempts don’t work, particularly in the first thirty to sixty to ninety days, the collectors will report the debt to all three credit bureaus. After ninety days, collectors might redouble their efforts. Some will file a civil lawsuit against the borrower.

If the lender does file a lawsuit, and the borrower loses the case, the lender can seek a wage garnishment, place a levy on the borrower’s bank account and even file liens against the borrower’s property.

One way of getting out of payday loan debt is to get onto a payday loan debt consolidation plan. This gives the borrower the option to make small monthly payments and become debt free.

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