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What Can I Do With the Payday Loan Vicious Cycle? – Dodie

“Dear Steve,

Payday loan overload. I am broke and getting worse every payday.

I am in the vicious cycle of payday loans and i am delinquent on some and they are threatening me with garnishments and employer contact. I can not seem to get out of this debt cycle and it takes all my paycheck to pay interest that I have been paying for years now. I need help and I need it fast.

Dodie”

I asked my friend Mike Killian to answer your question for you. I wanted to make sure you got an answer as quickly as possible as I’m a bit backed up at the moment. I’ll be watching the comments on this question and be around to help if you need me.

 

Dodie,

The first step is to contact each lender and see if anything can be done. If nothing else, you have at a minimum tried. Consider the fact that not paying a payday loan vender is no worse than not paying any other debtor so keep this in mind. Their greatest asset is your fear.

One thing you can do immediately is close your existing bank account and open a new one. Start making any payments to the payday people in cash or money order so that they cannot learn your banking information. Stop payment on any outstanding checks in order that you might defuse potential telecheck hassles.

I must assume you are getting payday loans because you cannot get a loan elsewhere. You might consider friends or family or selling something… anything to get out of this cycle. But depending on other factors including what type assets you have along with other debts, you may have only bankruptcy to legally get payday loan folks off your back… other than paying them off in full. Talk to a bankruptcy attorney. If you elect to file bankruptcy, it will be illegal for the payday loan folks to contact your employer. And they may not contact you unless they are dropping the issue or taking legal action.

Sincerely,

Mike

If you have a credit or debt question you’d like to ask just use the online form. We are happy to help you totally for free.

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About Mike Killian

Mike Killian
Mike Killian is founder of Learning Credit and Debt Management. He has been writing and teaching about credit and debt management issues for over 12 years. His articles have been referenced by various members of the media, including MSNBC and The Motley Fool. Mike has also offered debt elimination seminars to businesses and community colleges for many years. He has an MS in counseling and is a nationally certified as a Personal Finance Counselor. Mike can be found at LearnCreditManagement.com/.
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  • Anonymous

    Millions of Americans are burdened with Payday Loans. The Payday loan trap affects your quality of life with the high interest rates, the endless rollovers and the ruthless collection tactics. If you’re thinking about consolidating your debt, let the experts at Payday Loan Conceptz assist you today.http://www.paydayloanconceptz.com

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