How to Get Out of Debt With the Get Out of Debt Guy » cfsa

We Have 11 Payday Loans and I’m Trying to Get Into the CFSA EPP to Repay Them. – Aubrie

Steve Rhode — Sat, 09 Jan 2010 19:44:11 +0000

Aubrie

“Dear Steve,

My husband and I have been in the deathly cycle of payday loans for almost a year now. I work part time and he works full time and we have 1 daughter. Right now we are up to 11 payday loans totaling a whopping $6,500. I just barely stumbled upon the CFSA EPP. Only 4 of the places we loaned from offer EPP. When it comes to pay days we have a little bit left over but not much.

When can you enter EPP. Would it be a good idea to loan from other places that do offer epp to pay off some of the others. Any advice for getting out of this problem.

Aubrie”

The Answer:

Dear Aubrie,

For those that don’t know what a CFSA EPP is, it is the Extended Payment Plan offered by payday and cash advance lenders who are members of the Community Financial Services Association of America.

The EPP can be a reasonable way out of trouble with a payday loan but on my recent visit to some payday lenders I discovered a very important fact that isn’t in print. It seems that they would only allow one payday loan at a time in the EPP. See my previous post “Cristy Has Three Payday Loans And Can’t Pay Them” for the specific details of the EPP.

Since it sounds like your payday lender is a member of CFSA, they should provide you with a booklet that describes the EPP solution. The hurdle to get into the EPP is very specific, “You must invoke the EPP by close of business on the last business day before the advance due date by returning to the office where you obtained the advance or by using whatever method you used to obtain the advance. To invoke the EPP, you must sign an amendment to your agreement reflecting the new payment schedule.”

I don’t want to be too cynical here but I forecast that the payday lenders are going to give you a bunch of reasons why you don’t qualify for the EPP. Typically in similar situations people have turned to bankruptcy to resolve this problem since the lenders would not be cooperative.

My opinion is that payday lenders need to be on a central database so as to never extended more than one payday loan to one consumer at any one time. Let me know if you dig yourself out from this without bankruptcy.

Big Hug!

@GetOutOfDebtGuy

The Cash Store Won’t Help Me to Break The Loan Cycle. – Cindy

Steve Rhode — Thu, 31 Dec 2009 16:12:29 +0000

From How to Get Out of Debt

“Dear Steve,

I currently have an installment loan with The Cash Store and due to recent home repairs am no longer able to meet this obligation. The balance owed is $830 and I’ve been paying $369 every 2 weeks. I called them prior to my next due date to inform them that I am no longer able to pay and inquired about an extended payment plan which they advised they don’t offer. They continue to call asking the same question and in essence want me to come in an sign a new agreement for 10 payments which which add an additional $1,000 to what I already owe. They advise they will call 3x a day til an arrangement is made???

What do I do; I’m more than willing to make arrangement on the balance owed but there is no way I’m go ing to sign up for additional intererst.

Cindy”

The Answer:

Dear Cindy,

Interesting. If you have an installment loan from the Cash Store I bet it was for $2,000 or less. That’s why your comment about how much you’ve been paying and they want you to pay is alarming.

I did some checking and the Cash Store is part of the Community Financial Services Association of America, a payday trade association. This is important because members have promised to offer an EPP (Extended Payment Plan) to allow you to repay what you owe over four payments without additional interest.

For details on what the EPP offers see, Cristy Has Three Payday Loans And Can’t Pay Them

You can view the information about the EPP on the CFSA site here.

The CFSA link to the specific guidelines is here.

Poll – Vote Now

Note: There is a poll embedded within this post, please visit the site to participate in this post's poll.

Your homework is to go to your Cash Store office and tell them you want to repay your loan under the Extended Payment Plan (EPP) offered by The Cash Store as part of their membership in the Community Financial Services Association of America.

Report back by posting updates here in the comments section of your question.

Big Hug!

@GetOutOfDebtGuy

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.

Cristy Has Three Payday Loans And Can’t Pay Them

Steve Rhode — Fri, 19 Dec 2008 17:47:29 +0000

From How to Get Out of Debt

Cristy

“Dear Steve,

I’m so far behind that i have 3 payday loan, and im working full time, a part time job and going to school.

How do I get a head where I don’t have to use payday loans?

Cristy”

The Answer:

Dear Cristy,

Your payday loan question comes at a great time. Just this past week I had the opportunity to visit a couple of payday loan, payday advance, or cash advance stores and sit down with staff members and discuss these issues.

Your problem of having multiple cash advance loans from the payday loan stores highlights a current problem when using a payday loan store. Only in a handful of states is it required that a payday loan store or cash advance store make sure that you don’t have multiple loans outstanding. The new policy in those states is “one loan, one customer” but today, in the majority of states you could go from store to store and roll up a bunch of loans.

The store typically will not ask if you already have loans outstanding and it will become your sole responsibility to make sure that you don’t borrow more than you can afford. People are often not the best watchdogs of their finances, especially in urgent situations or difficult times.

The minute that you take out a second or multiple cash advances by writing a postdated check in order to have cash in hand right now, that’s a warning sign. Borrowing more when you can’t repay what you’ve already borrowed is a lethal blow to your financial health.

The Community Financial Services Association of America (CFSA) is a payday advance industry group and payday advance companies that are members of the CFSA may offer you an EPP (Extended Payment Plan) to allow you to repay what you owe over four payments without additional interest.

Each member will provide customers who are unable to repay a payday advance according to their original contract the option of repaying the advance over a longer period of time. Such an extended payment plan will be offered in compliance with any requirement in state law to provide an extended payment plan or, in the absence of such a requirement in state law, in compliance with the Best Practice “Guidelines for Extended Payment Plans.”

A member will adequately disclose the availability of the Extended Payment Plan to its customers in compliance with any requirement in state law for such a disclosure or, in the absence of such a requirement in state law, in compliance with the Best Practice “Guidelines for Extended Payment Plans.”

Each member shall provide an Extended Payment Plan (“EPP”) for customers who are unable to repay a payday advance. Each member will offer such an Extended Payment Plan in compliance with any requirement in state law. If no such requirement exists in state law, then the member shall adopt a plan that offers the customer at least the following provisions:

If you [the customer] are unable to repay your advance when due, you may opt in to an EPP to pay the outstanding advance at least once in any twelve month period. Any outstanding fee will be included in the amount subject to EPP.
You must invoke the EPP by close of business on the last business day before the advance due date by returning to the office where you obtained the advance or by using whatever method you used to obtain the advance. To invoke the EPP, you must sign an amendment to your agreement reflecting the new payment schedule.
You may pay the transaction balance in four equal payments coinciding with your periodic pay dates.
We will not begin collection activities while you are under an EPP as long as you meet all obligations under the EPP.
There is no charge for you to enter into an EPP. However, if you default on an EPP, we may charge you an EPP fee and accelerate payment on the balance remaining, as authorized by applicable law.
If a state has adopted a requirement for a repayment plan in state law, members shall comply with those requirements. The CFSA Best Practices Extended Payment Plan may not be available to customers in states with statutory payment plan requirements.

I have previously written about how a payday advance or payday loan could be used in limited situations and makes sense. However, the minute we start talking about rolling over payday loans or having multiple cash advances outstanding, well then we’ve got a whole different kettle of fish.

The only way to dig yourself out of the payday loan hole is going to be to get the loans paid off in full, to see if the stores you got the loans from will allow you to enter an EPP to pay them off, or go bankrupt.

Ultimately the secret to getting ahead to not have to use payday loans is to make sure that your expenses do not exceed your income. Anytime that happens then you are going to have problems. What I’d rather see you do is to stash away any extra cash you might get into a savings account. That way, in leaner times, you can reach into your savings account and borrow cash from yourself to make ends meet.

Big Hug!

@GetOutOfDebtGuy

Photo: Steve Rhode

How to Get Out of Debt With the Get Out of Debt Guy » cfsa

We Have 11 Payday Loans and I’m Trying to Get Into the CFSA EPP to Repay Them. – Aubrie

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