Stop Payday Loan Debt Collections

Payday loan debt collectors are among the most persistent and ruthless. They’ll harass you at home, at work and even call the references you put down on your cash advance loan application. The reason these collectors are so over-the-top is because they know the statistics. And those statistics unequivocally reveal that after just 90 days has elapsed from the initial due date, the chances of collecting payday loan debt are near impossible.

Of course, the lender can always pursue other payday loan debt collection methods. Like reporting the delinquency to the three credit monitoring agencies. Or, the lender can collect past due payday loan debt by filing a lawsuit against you. If they win–which often happens–then the lender can seek a court order to garnish your wages, file a lien against personal property or even freeze your bank account with a levy order.

How Payday Loan Debt Accumulates

Payday loan debt adds up very quickly. And that’s because it’s actually designed to do so. From the lender’s point of view, the more you owe in a short period of time, the more likely you are to take advantage of their “extension” or “roll over” options. Here’s why:

You apply for a $400 loan and are approved. But you get $380 in cash–the $20 difference went to pay upfront fees. Now you have two weeks to come up with $400, the principal, plus $80 in interest. Knowing you have to spend the loan money immediately, the lender is counting on the fact you won’t be able to afford to repay $480 and still have enough for living expenses. So, you’ll roll over or extend your loan for a service fee or an amount generally equal to the interest. That $80 in this scenario means you’ve already paid $100 to get $380 in cash but still owe the entire $480.

Stopping Payday Loan Debt Collections

The only way to stop payday loan debt collections is to deal with it head-on. If you can’t come up with the cash yourself, try a payday loan consolidation plan. With a professional payday loan consolidation company, you’ll have a team working for you! They’ll get your loan restructured and/or reduced. Plus, they’ll be able to get you debt free by just making small monthly payments.…

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What Can Payday Lenders Do to Collect Bad Loans?

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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