How to Stop Payday Collectors

If you have been in a financial bind, you may have taken out a payday loan. Payday loans are high interest loans because they have no credit requirement. Depending on the term of the payday loan, interest rates can be exorbitant, such as almost 400% in Cleveland in 2008, according to CNN. While you may have gotten the payday loan because you were in financial trouble, paying back a payday loan debt can oftentimes strain you financially. If payday debts are not paid, you may be contacted and harassed by a payday collector.

Instructions

1

Send a cease and desist letter. Under the Federal Trade Commission, you have a right to stop collection harassment from lenders. In your letter, write that you wish for no more verbal communication from the lender. Indicate that you will accept only written communication but do state your intentions on paying the debt. If not, the payday lender may decide to take you to civil court. The letter should be sent by certified mail with a return receipt by the U.S. postal service so you have proof that the payday lender received your letter.

2

Contact a consumer credit counseling agency to get your debt consolidated. Consumer credit counseling agencies focus on working with unsecured creditors directly to get you out of debt. You can include all unsecured debts, including payday loans, in your debt consolidation. In finding a consumer credit counseling agency, check with the Better Business Bureau to ensure the agency is legitimate. The agency and you will work together in putting your payday loans into one payment for you that you will send to the agency. The agency will then disburse payments to your payday lenders. This consolidation will help keep you on track so you do not fall behind on payday debts.

3

Consider bankruptcy. Bankruptcy is a reorganized payment plan that is provided by the bankruptcy court in the state in which you live. There are a few different types of bankruptcy filings, including Chapter 13 and Chapter 7. Under Chapter 13, you are able to keep secured property, such as automobiles and your home, and debt is repaid through a three to five year payment plan. Under Chapter 7, you will liquidate all of your assets but do have an option of exempting your automobiles, household property and work-related necessities. Other property under lien may be sold or given back to creditors under the Chapter 7 plan, according to the Federal Trade Commission. Work directly with your attorney to determine which bankruptcy filing is best for you financially. Under bankruptcy, no creditor can contact you, including payday lenders. Bankruptcy gives you an opportunity to resolve delinquent accounts and start over financially.