I’m Way Over My Head in Payday Loans. – Alan

Alan wrote to me through the GetOutOfDebt.org site and asked the following question. If you have a credit or debt question you’d like to ask just use the online form. I’m happy to help you totally for free.

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“Dear Steve,

When my employer was having money problems….my paychecks got cut by 2/3rd. I got myself into major payday cash advance problems. All I make now goes to just the fees…how can I get out of debt with these horrible companies?

If I don’t make my payments to them…will they just go to a collection agency? I can afford to pay $1,000 per month toward a debt with these companies of $7,000. Right now I pay $1700 a month in just interest….will never see an end. HELP

Alan”

The Answer:

 

Dear Alan,

I am a caring and compassionate soul, but let me be blunt with you here, you’re screwed. You are never going to dig yourself out of this hole unless you’ve got a lot of extra money to pay down this debt.

Go meet with a local bankruptcy attorney, go bankrupt, it will eliminate that debt and then never take out a payday loan for ever again. Friends don’t let friends get payday loans.

There is an appropriate and limited use for payday loans but the industry has not embraced responsibility to limit abuses by payday loan and cash advance companies. Thus, as far as I’m concerned right now, at this moment, they suck.

Big Hug!

Im Way Over My Head in Payday Loans. Alan payday lender payday loans payday loan pay day loan cash advance loan cant pay back payday loan ask the get out of debt expert
@GetOutOfDebtGuy

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  • Steve Rhode

    Hopefully whoever you are working with let you know that cease and desist letters are not binding on the original creditor, only third party collectors. Sending the letters to a collector often just drives you to be sued faster since you ceased communications and left the court as an avenue to deal with it.

  • Ann Johnson

    I have enrolled in a pdl program and it is working for me okay, but the lenders employees continue to threaten me with jail…. I am not tryng to get out of paying them, but I have gotten in over my head and I am trying to do the best I can.. The companies have been informed and have recieved the cease and desist letters and continue to call what can I do now.

  • Ann Johnson

    I have enrolled in a pdl program and it is working for me okay, but the lenders employees continue to threaten me with jail…. I am not tryng to get out of paying them, but I have gotten in over my head and I am trying to do the best I can.. The companies have been informed and have recieved the cease and desist letters and continue to call what can I do now.

    • http://GetOutOfDebt.org Steve Rhode

      Hopefully whoever you are working with let you know that cease and desist letters are not binding on the original creditor, only third party collectors. Sending the letters to a collector often just drives you to be sued faster since you ceased communications and left the court as an avenue to deal with it.

  • Arthur Thomas

    Hello Kristen,

    I would suggest that you get a copies of your credit reports from the three credit bureaus. Check your credit reports for any inaccurate info. If all three of your credit reports show that you have no credit at all, then it is easier for you to get credit than someone with currentlu bad or negetive credit.

    This my sound stupid, but it could work. Here are the steps to take to break the payday debt trap.

    Apply for a secured credit card or savings or certificate loan at your bank or credit union. If your bank doesn’t offer secured card or savings/or CD loan, then I try another bank that offer secured credit products or better yet, a credit union. With a secured credit card or saving loans, you are using your own money to help build up a positve credit history or rebuilding your credit. For the secured credit card, charge no more than 30 percent of your total limit, pay a least the minimum payment on time, don’t go over your credit limit, and make sure you have sufficient funds in your checking account to cover any amount you wish to pay. Do this for at least six or seven months, than you shound qualify for a low or no annual fee prime credit card or singature loan. Apply for several credit cards and singature loan. Take out the whole cash advances from the cards and use the cash along with the loan to payoff all the payday loans. Once yor are done with the payday loans, cut up all the cards but keep one. When it time to pay up for the credit card and loan, you be making affordable monthly flxible or fixed installmet payments rather than the single full payment demand by payday lenders. You will pay interest on the credit cards and installment loan, but interest you would pay is 20 to 40 times cheaper than a 14-day payday loan. And try to pay down the balance on the credit cards to zero. Remember, your credit reports must show you have no credit histoy-that is no outstanding debt, no history of making payments on any credit cards or loans, and no negetives info like collections, charge offs, late payments, child support, or tax liens. People with current bad or poor credit have these info on thier credit reports, not those new to credit.

    Also would suggest you try a credit union, and show then the following youtube video and the website and webpage of a community development credit union called “Northside Community Federal Credit Union” and the small short term loan this credit offers. If the credit union you join, follows the the lead of Northside credit union, then you can disregard my advice above.

    http://www.youtube.com/watch?v=ZD3OCLUwOHA

    http://www.northsidecommunityfcu.org/other_loan_products_servic.html

  • Kristen

    Dear Steve,

    I am way over my head in payday loans. I pay 1000.00 a month in interest. I have taken out 1425.00 in payday loans totaling 5 loans. I was told that if I closed my bank account they would contact me to set up payment arrangements. Is this true? I get paid every two weeks and I could afford to pay have half of the loans paid off on the 2nd and the other on the 6th but when I talk to the payday companies they tell me that they cant do that because it is not my payday. Do you have any advice?

    Kristen

    • http://GetOutOfDebt.org Steve Rhode

      Kristen,

      With you not making payments and the bank account closed they could just as well send the sheriff to your door with a warrant for writing bad and dishonored checks. If they don’t negotiate and send you to legal action then it’s probably bankruptcy for you.

      Steve

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