With payday loans, a borrower writes a postdated check to a payday lender in exchange for a short-term cash advance. Florida sets strict fee limits on payday loans and prevents borrowers from having more than one outstanding loan at a time. In addition, Florida lenders may not rollover a payday loan, a process which involves extending longer payment terms to loan customers. Instead, borrowers who cannot pay back their payday loan at the end of the loan period can opt to participate in a state-approved repayment plan.
Notification
Under Section 560.404 of the Florida Statutes, all Florida payday lenders must inform borrowers of their rights to a repayment plan, if they cannot pay off a loan by the due date, and clearly disclose all loan terms. Each provider must list these terms in 14-point font in capital letters with the borrower signing at the bottom to show that he understands the repayment options available to him.
Counseling
A payday lender must extend the terms of the payday loan for 60 days if the borrower completes consumer credit counseling by a state-approved provider. The lender must provide to the delinquent borrower a list of approved credit counseling agencies affiliated with the National Foundation for Credit Counseling and their respective phone numbers and locations. An agency will work out a budget or plan for the debtor to pay off the loan, which the debtor must then submit to the payday lender. Per Florida law, debtors may complete credit counseling over the Internet, in person or by telephone.
Time Frame
Delinquent debtors must notify the payday lender of their intentions to complete credit counseling no later than seven days after the due date of a payday loan. Debtors must set an appointment for credit counseling within this seven-day window and complete the program within 60 days. Florida does not set a time limit on how fast the debtor must pay back the payday loan.
Repayment Plan Forfeiture
If borrowers fail to provide seven- or 60-day notice to the payday loan company, do not complete credit counseling and do not set an appointment for counseling, they waive their right to a repayment plan. According to Section 560.404(22)(b)(3) of the Florida Statutes, the payday lender may deposit the payday check on the due date, resulting in an insufficient funds bank fee. Florida payday lenders cannot charge extra interest or fees for late or delinquent payments, but these organizations may use all legally available civil means to collect the money owed to them, such as hiring a collection agency to enforce the debt.
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