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How to Settle Payday Loan Debt

The economy is getting worse and the number of people turning to payday loans has steadily increased. A payday loan may help initially but will almost inevitably hurt your finances in the long run. This post deals with payday loan settlement. We are going to explain you how to settle payday loan debt, and how to escape payday loans eventually, but the main thing to understand right away is that such a settlement is nothing like a payday loan consolidation. The goal of either technique is obviously the same, to help you with the debt you accumulated by taking the loans that you have now trouble to repay. But settling is not consolidating. Instead of taking another loan, payday or not to consolidate your existing ones on better terms, you are negotiating the debt down. How you got into that mess is not important. What is, is to understand that in order to settle payday loan debt you must act diligently and in several ways.

Payday loan settlement – know your lenders
Plan your escape carefully. It does not really matter if you have a dozen payday loans or just a couple. Once you decide you have had enough, it is high time to act. Take a piece of paper and write down all payday loans you have, breaking them down by two categories – Internet or brick and mortar stores, with the amount borrowed and the total amount paid to each lender, including interest, fees and what have you. It is very essential because they are regulated differently, and how you settle your debt depends on which category your payday loans fall and your state laws.

How to settle payday loan – check your state licensing laws
One of the key steps for a successful payday loan settlement is to see if the state law requires Internet payday loan companies to be licensed in your state or it accepts other state licensing. Almost every state requires payday loan lenders to be licensed in the state, regardless of where they located. There are two sites to check, Internet payday loan state laws and Payday loan consumer information.
Since the large majority of Internet payday lenders are not licensed anywhere in the country, but simply maintain a P.O. Box somewhere in the easy going state of Delaware, you will have a huge opening to settle the debt. As a matter of fact, if an Internet payday loan shop does not have required licenses, you can simply tell them to get lost and do not pay a dime. Quite a settlement for you, but it is not too nice since you did take their money on the first place, so at least pay them back the principal.

Payday loan settlement – check the maximums
Smart crooks do not fight the law, they bend it just so. The greedy ones do break the rules, hoping that dumb, uninformed borrower, and that would be you, has no clue. So they lend you as much as they could and charge you as high as they can get away with. Still, there are laws even crooks must abide by. If they violate even one, you have another opening for a settlement. Verify the laws in your state regarding whether rollovers are permitted, and the maximum allowable interest, fees and loan amount. That goes for both, duly licensed Internet lenders and your neighborhood brick and mortar stores.

Payday loan debt settlement with CFSA members
Many of your delightful friends are hopefully the proud members of the Community Financial Services Association of America, which, according to its website, is solely dedicated to promoting responsible regulation of the payday loan industry and your protection. The CFSA is further committed to working with policymakers and consumer advocates to ensure your financial safety and overall well being. It is so touching I am crying already. Sarcasm aside, those payday loan lenders that belong to CFSA, and those almost universally will be the neighborhood brick and mortar shops, are required under the membership rules to set up payment plans for the borrowers in distress. But to get any type of debt settlement with a CFSA member, you must file the request to settle before you default on your debt. And since such payday loan lenders are perfectly legal, law-abiding business entities, be prepared to repay your loan with interest and fees. Otherwise, you can be sued for the whole amount plus attorney fees and court costs. Thus, you better play nice and they are likely to settle or rather rearrange your payday loans in a way you can eventually escape them.

Escape payday loans – closing bank account
Close the checking account where you pay is deposited before the next pay date. Ask your payroll department for a regular check until you sort things out and can safely open a new account. Certainly, do not announce your intentions to close the account to your Internet payday loan lenders, but do it very quietly and quickly, otherwise they will go after your account immediately. After that, send Letter to revoke ACH debit authorization to each and every one of the lenders involved. Also revoke any wage assignment agreement you may have signed and give a copy to your payroll department.

It is imperative to check with your bank to make sure it will not force open your account if an ACH withdrawal comes through after you close it. After that you can settle your payday loan debt on your terms. And of course, never give the new bank account or credit card information to any payday loan lender. Once your settlement is reached, pay only by money order, wire or prepaid debit card. And of course, no post dated checks.