If you fail to repay your payday loan, it can lead to a series of repercussions including things like bank overdraft fees, a lot of calls asking you to pay back the money, your credit score getting a massive hit as well as going to the court in order to pay back the money owed to the money lender.
What You Can Expect If You Don’t Repay A Payday Loan
If you don’t think that this can happen to you if you have only borrowed a small amount from the moneylender, you should read what Bruce McClary has to day. He is the current spokesperson working for the National Foundation for Credit Counseling.
You, however, have some choices such that making a settlement with your money lender for paying back less than what you owe currently or if that doesn’t work out, you can file for bankruptcy if the amount you owe can’t be paid back in any case.
Bank Withdrawals As Well As Calls Regarding Repayment
Payday lending banks don’t sit around idly when the cash you owe not paid back on time. They’ll promptly start programmed withdrawals from your bank account if you have given them access to your checking account as mentioned in the lending contract. In the event that you haven’t got that much money in your bank account, they may break the total amount into little pieces trying to get out whatever amount of cash is in your record.
Along with this, if you do not even have some amount of money in your account, your account will get withdrawal fees for each failed attempt the lender makes in order to get the money. A lot of such withdrawal costs could deplete your financial balance and cause different exchanges to skip, bringing about more expenses.
In the meantime, banks will begin calling, sending letters from legal advisors and reaching the relatives or companions you had set as references when you took out the payday loan from the money lender. By government law, payday loan money lenders can request help in finding you and they don’t have to give the information of your circumstances and the amount of money you owe to anybody.
Threats Of Jail Time By The Moneylenders
If you cannot pay back your payday loan then it will not be seen as a criminal case by the courts. However, it does not stop some payday loan lenders to threaten you against filing court cases. Some payday lenders have come up with loopholes in the system using bad check laws that enables them to file a suit against a payday loan defaulter. You cannot do anything about it and if you are in such a case then it is just wise to ignore these types of threats by the payday loan lender and try to come up with an agreement with the lender.
If you have been charged with a lawsuit by your payday loan lender for non payment of your loan, then you should contact their state lawyers office as instructed by the Consumer Financial Protection Bureau. In any case, you should not ignore any court hearing dates if you have been charged by a lawsuit by your payday loan lender. Even if you think that you have been charged by your payday loan lender without any legal ground.
Agree For A Settlement With Your Payday Loan Lender
If you have defaulted on your payment then most of the payday loan lenders sell your debt to a third party loan collector at a far less valued that you owe to them. However, if given the chance, they will opt to settle the loan with you directly instead of selling your loan to a third party collection agency. You can take this opportunity to negotiate your payday loan debt with your payday loan lender. You should start the negotiation with half the amount that you owed.
On the off chance that you have failed to reach to a settlement with your payday loan lender and they have sold your debt to a debt collection agency then you should learn how to deal with the debt collectors as it is on record that they go to massive lengths to recover your debt. The collectors could show up to your place of work and call you multiple times in a single day, sometimes more than 10 times in a day and as mentioned before, they can threaten to sue you.