Question:
Dear Steve,
I have seven payday loans.
I can’t pay my online payday loans. I have already closed my bank account. What should I do?
Evelynne
Answer:
Dear Evelynne,
The fact these are online payday loans makes me wonder if these payday lenders are even registered to offer loans in the state where you live.
This has been a problem for many. Online payday lenders have been pushing loans to people in states they are not authorized to lend money.
You could ask your payday lenders if they have an Extended Repayment Plan to allow you to repay your loans. But, of course, that is if you can even afford to do that.
You could contact the State Attorney General’s office where you live and ask them for help to determine if your lenders are authorized to lend in your state. If not, they might ask you to file a complaint against the company, and once the Attorney General’s office contacts the payday loan company, the payday loan might just be canceled.
Another option might be to consider bankruptcy to close the door forever on the payday loans without putting in the legwork to research them and fight that battle.
You might have other debts that could benefit from a bankruptcy discharge.
If so, talk to a licensed local bankruptcy attorney to practice law in the state where you live and discuss your overall situation.
You have seven payday loans makes me wonder if you’ve been living on the financial edge for a long time and don’t have a savings account or emergency fund to use in tough times.
If the payday lenders are the only people willing to lend to you, something else is going on.
Homework
I would pursue this matter in the following order.
- Ask your lenders if they have an Extended Repayment Plan to give you a way out if you can afford the payments.
- If the lenders are not helpful, contact the Attorney General’s office in your state and ask them for help to determine if the companies are even authorized to lend to you. If not, file a formal complaint.
- If you live on the financial edge, talk to a local bankruptcy attorney.
Come back and report on what you decide to do by posting an update in the comments.
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Here is my take. Online payday lenders don’t file lawsuits. They will call and intimidate till the cows come home. That can be solved by changing your phone number and ignoring emails. Why don’t they file lawsuits? It costs money to file a lawsuit. They would have to file where you live and they aren’t anywhere close. And if you got a payday loan in the first place its a good indication that you have very little income. So it makes no sense for them to file a lawsuit. They would never be able to collect. They will of course threaten that and a bunch of other things. But as online payday lenders they are in a very sketchy business. One of the reasons they charge such high interest is they know many of the loans they make go south. Many payday lenders are based on indian reservations so they can’t be sued for violating debt collection laws. Or better yet they are based overseas. Some even advertise as overseas payday lenders like that is a good thing. But its so they can lie and threaten without consequence. So you can simply choose to stop paying but you will want to change your contact information otherwise they will threaten and intimidate and lie to get you to pay. They can be very intimidating. Bottom line you can simply stop paying them.
Eric Executive Director HELPS Nonprofit Law Firm attorney for 42 years.