Nobody likes to stay in debt. It’s a bad feeling, and a financial state that is likely to affect the way you lead your lifestyle. For instance, if you have taken a home loan or a car loan, which are usually for the long-term, then most people will always want to pay back the month’s due before anything else. It’s a top priority. Everything else has to wait.
But what about short-term loans, like a payday cash advance, for example? These are small dollar loans where the loan is offered for a couple of weeks till the next pay day. The amount is also usually between $500 and $2000, and as such, a high majority of people can pay back their debt on time without a problem. It is not a problem usually. But sometimes, unforeseen things happen. That’s life. You may suddenly face a situation where you had to spend more than anticipated, and at the beginning of the next month, you simply don’t have the money to repay the creditor.
Harassment by Debt Collectors a Real Problem
If you are in debt, and can’t repay, many debt collectors will keep calling you, making embarrassing calls, sometimes several times in a day. Suddenly, you will see many of them turn aggressive, though there are many ethical and legal payday lenders who will give you a second chance to repay. But these are exceptions. Usually, you will be in a lot of trouble from these creditors. It is not uncommon to feel like running away.
Of course you cannot run away, because there is no running away from your commitment to pay back. All you probably need is some understanding, a bit more time perhaps, and a second chance. Almost everyone wants to pay back the debt and stay out of trouble. The intentions are almost always honest.
What Can You Do?
So how do you keep the debt collectors at bay? Is there a way? What can you do? let us find out what your options are.
According to a survey carried out by the Consumer Financial Protection Bureau, 40 percent of people in debt said they felt threatened by debt collectors. They reported callers calling them four times a week or more. And what is more serious is that, more than half of these calls were about debts that were incorrect. For instance, in some cases it wasn’t the right person or the amount due was wrong.
• So the first thing to do is to confirm that you are indeed the right person
• Second, check the amount to confirm that the amount is correct
Confirm the Collector Is Legally Authorized to Collect the Debt
You will be surprised how many times debt collectors without any legal authority will make embarrassing and harassing calls. You can put them off if you raise these issues.
Demand proof that the collector has the legal right for collecting the debt. Also, as mentioned above, confirm the amount. This is important because sometimes they will add their fees and also interest, which they cannot collect legally. If required, you may also seek legal help, and also lodge a complaint with the consumer bureau, the FTC You may also approach your state attorney general’s office.
How to Know Whether the Debt Collector Is Legal?
Ask these questions – Name of the original lender, and street address of the collecting agency. It is likely that scam callers will disconnect the line immediately as soon as you begin to ask for details.
Can You Stop These Calls Legally?
Thanks to the Fair Debt Collection Practices Act, debt collectors are bound to stop contacting you when you ask them do so in writing. There are templates in the Consumer Financial Protection Bureau website you can use. But remember, your unpaid debt won’t go away even if they aren’t able to contact you.
Also Do The Following
Get Everything Written on Paper – Debt collectors cannot pursue you legally unless you are given a written statement where your debt details are clearly mentioned. Also, you should receive this statement within five days of receiving the call. There is no need for you to say anything over the phone till you receive this letter. In fact, you may even sue the debt collector for harassment if you don’t receive the statement within five days.
Cease and Desist Letter – In-house collection agents of credit card companies and banks disclose their identities. However, there are many third-party collectors that will purchase your debt from the creditor, and they are not so forthcoming. They will always want to keep their identities secret, because they know that according to the provisions of the Fair Debt Collection Act, you can ask them to stop calling you in writing. You can force them to disclose the name and address. Then issue certified letters to stop them calling you. Always issue certified letters so they cannot deny receiving them!
Know Your Rights – Don’t believe anything debt collectors tell you. The FTC has slammed many collection agencies for deceiving people into believing they owe money, while there was actually nothing due. Know your rights in the state, which can vary depending on where you are staying.
Record Everything – Record the entire conversation you are having with a debt collector, and tell the person that he/she is being monitored and recorded. Get it in writing, if you make an agreement with the collection agency. File the letter. You will have a strong case if the agency crosses the line, and you can then take them to court.
Payday Lending and Debt – What Can You Do
Payday lending is a legal business where most the lenders follow ethical practices. Businesses that are members of the CFSA or the Community Financial Services Association of America cannot force you to repay the amount. They coerce you in any way. The lending company must give you time till the next four paydays to repay the amount due if you missed the due date. No extra fees can also be charged for this.
The Extended Payment Plan
Not many people know about this, but if you cannot repay your payday loan debt on time, then you may always ask for the Extended Payment Plan or the EPP. We also offer The Extended Payment Plan. Contact us when you are not able to pay the loan back in time.
Under the provisions of the EPP, you will have additional time to repay the debt, and the creditor cannot charge you for this delay.
But remember to inform the creditor before the business closes on the day your amount is due that you are unable to repay and need some extra time. Call up, or send an email early. Better still, don’t wait for the last moment. Inform earlier. Carry a print out of this page if you are visiting the creditor’s office. Send the link over email if you are emailing.
No payday lending agency can deny you the extra time you need
The creditor will then make you sign a new statement, which mentions the new payment schedule. There will be four equal payments in this, spread over the next four paydays. That’s four more months for you to repay the debt. The fees will be included. But there won’t be any new fees or interest. The lending agency cannot send a collection agency or hassle you to pay up forcefully.