What Happens If I Don't Pay Cash Advances?

Sudden financial difficulties can strike anyone at any time which can create an immediate need for cash. A cash advance is a short-term loan or a cash withdrawal made with a credit card that enables a borrower to access money quickly. Short-term cash advance loans are also known as payday loans. Failing to pay back short-term loans or credit card cash advances can lead to many negative consequences.

Interest Accrual

One detrimental impact of failing to pay back cash advances promptly is that interest will accrue on the amount you owe over time. The interest rates charged on cash advances tend to be extremely high, so if you fail to pay a cash advance for a few months, the amount you owe could increase rapidly. Cash advances made with credit cards often have higher interest rates than normal credit card transactions and interest may accrue immediately after making an advance.

Fees and Penalties

Another consequence of failing to pay cash advances is that the lender will likely add various fees and penalties to your account. Every time you miss a payment you will probably incur a late-payment fee. The combination of interest accrual and fees can result in a rapid increase in the amount you owe, making it very costly to get out of debt later.

Debt Collection

If you fail to make payments on cash advances long enough, your lender might hire debt collectors to try to get you to pay your debts. You might get mail or phone calls from collectors requesting payment and collectors might file a lawsuit against you to force you to pay. A court judgment could result in wage garnishment, meaning your employer would be required to send a portion of your income to your lender to pay back your cash advances.

Considerations

Since balances owed on cash advances can increase extremely rapidly, the Federal Trade Commission recommends that consumers consider alternatives like a small loan from a credit union before taking out a cash advance. High levels of debt can lead to bankruptcy; bankruptcy has a severe and long-lasting negative impact on credit, which can make it difficult to borrow in the future.

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Debt Vs. No Debt

Debt can be a dirty word for many people. Some may believe having debt means you can't manage your money. Others may consider it a warning sign that they're headed for financial peril. Not all debt is bad -- however, you don't want the bad debt, because it can hurt your financial situation. Whether you should carry debt or not comes down to the reason you have debt.

Good Debt

Good debt is accumulated by doing things that will help you in the future, such as student loans and a mortgage. A student loan is used to obtain an education, something that will benefit you throughout your life. Plus, you can earn that money back in your working years and will be able to pay off your loans. A mortgage helps you build equity by owning your home. When your home is paid off, your property often has appreciated in value --- which is typical unless a recession occurs --- so your mortgage debt may end up making you money down the road.

Bad Debt

Bad debt usually is anything that falls outside of a student loan or your mortgage. If you are accumulating debt by purchasing vacations, luxury items or anything else you can't afford, that is bad debt. This debt may be accumulating on your credit card, which often charges a high interest rate. As a result, your debt grows each month because you are paying fees for having a debt.

Why Get Rid of Bad Debt

Ridding yourself of bad debt has many advantages, such as owing less to creditors and improving your credit score. The less you owe your creditors, the less you will pay in interest. About 30 percent of your credit score is based on how much you owe. Your credit utilization ratio, as measured by the amount of debt you carry relative to your credit limit, influences your credit score. Getting rid of debt and lowering that credit utilization ratio will improve your credit score, allowing you to obtain better interest rates and easier approval for loans such as a mortgage.

Getting Rid of Bad Debt

If you need help getting rid of bad debt, consider a few strategies. Create a budget. Compare your expenses to your income. If you are spending more than you are making, cut down, so that you are saving -- or profiting -- at the end of each month. Use those savings to pay down debt by using one of two methods noted by the Consumerism Commentary website: the snowball method, in which you pay down your debts starting with the lowest outstanding amount and moving up, or the avalanche method, which starts with paying the debt that has the highest interest rate and moving down. If you need help, consider talking to a financial counselor.

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Can You Be Criminally Charged for Defaulting on Payday Loans?

A payday loan is a small loan taken out for a short period, usually several days to one month, at an exceptionally high rate of interest. When a borrower takes out a payday loan, he generally signs a contract agreeing to pay back the loan within a set period. If the borrower defaults, the lender has the right to sue him. However, generally the borrower cannot be criminally charged for defaulting.

Payday Loans

Although the interest rates for payday loans are generally far higher than for most other types of loans, the legal protections are the same. According to U.S. law, if a person signs a written contract in which he promises to pay an amount of money at a certain time, he is legally obligated to do so. If the person fails to pay this money according to the contract's terms, he violates civil law.

Criminal Debt Laws

The U.S. does not have debtors' prisons. Unless a person owes money to the federal or state government for child support, he cannot be charged criminally or placed in jail for owing money. While a person can sometimes be charged criminally if the debt is obtained illegally, such as through fraud, defaulting on a payday loan is not a criminal offense. The matter must be settled in civil court, and then only if the lender files suit.

Hot Check Laws

Some states, such as Missouri and Texas, have criminal laws for "hot" checks -- checks that the issuer knows cannot be cashed. It is a common misconception that borrowers who attempt to pay for payday loans with bad checks can be charged criminally. However, according to the attorneys general for Missouri and Texas, checks issued for payday loans do not count as "hot checks".

Ancillary Charges

While a person cannot be criminally charged for defaulting on a payday loan, he can be charged for other offenses stemming from issuing the bad check. For example, if the debtor is sued in civil court by the creditor and then fails to appear on the required date, he may be held in contempt of court, a jailable offense.

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Qualifications for Mortgage Modification

A mortgage modification may be a last-ditch effort for a number of homeowners, who have fallen on hard times and fear a future foreclosure. Qualifications for mortgage modification were implemented by the Treasury Department to serve as general guidelines to participating banks, and they represent a minimum standard these financial institutions must follow when working with debtors. Banks may have their own guidelines as well, making it more complicated for homeowners to participate in the planned stabilization of the housing market.

History

The current set of qualifications for mortgage modifications dates back to the Homeowner Affordability and Stability Plan, signed in February of 2009 by President Barack Obama. A copy of the executive summary is referenced in the Resources section.

Time Frame

The program began in February 2009, backed with $75 billion in federal funding.

Function

Banks participating in the president's mortgage modification program set forth a list of qualifications you must meet. The goal is to separate the responsible homeowner -- who may have fallen on hard times -- from the homeowner unlikely to be able to make payments, even after signing a modification deal.

Effects

The Obama Administration estimates that the Homeowner Affordability and Stability Plan will assist upward of seven to nine million homeowners, who are facing tough economic times and are struggling to hold on to their homes. The qualifications for mortgage modification open the doors to loan restructuring or even refinancing, so that monthly house payments drop and become affordable.

Identification

Qualifications for mortgage modification help identify eligible homeowners. According to the government's Making Home Affordable program, a homeowner may only apply for a loan modification on a primary residence with a mortgage of less than $729,750. In addition, the mortgage needs to have been written before Jan. 1, 2009 and must currently demand a payment that is more than 31 percent of the borrower's gross income. You may include your property taxes and homeowner's insurance in the payment total, which is oftentimes already the case for borrowers with an impound account.

Misconceptions

It is a common misconception that any consumer meeting the qualifications for mortgage modification will be issued one. Keep in mind that this is a voluntary program that not all banks participate in, although Fannie Mae and Freddie Mac were directed to allow modifications on all of the loans they hold or have backed. Banks that do participate in the plan still have certain credit guidelines they set. For example, if you are a borrower with negative cash flow on a monthly basis, you may not be offered a home loan modification simply because your debt-to-income ratio makes it unlikely that you will meet your financial obligations.

Additional Qualifications

In order to qualify for a modification, your house must be your primary residence and you can't have been convicted in the last 10 years of a felony involving larceny, theft, fraud or forgery, money laundering or tax evasion in connection with a mortgage or real estate transaction. You must also be able to establish your ability to make the modified mortgage's payments.

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How to Reduce a Homeowner's Payment

If your monthly mortgage payments have become unmanageable because of a reduction in income, job loss or an increase in non-mortgage expenses, you may be at risk of falling behind on your payments. If you miss payments and cannot catch up your delinquent balance, your delinquency may pose the risk of foreclosure. However, you may use several strategies to lower your mortgage payments, which can provide you with the relief you need to avoid financial disaster.

Instructions

1

Shop for a mortgage refinance loan. In some cases, this can help by allowing you to obtain a lower interest rate and extend your mortgage balance over a longer period of time. If your mortgage payments are current and interest rates have fallen since you purchased your home, a lender may approve you for a refinance loan to lower your monthly payments.

2

Ask your lender to cancel your private mortgage insurance if you have more than 20 percent equity in your home. Although you pay for private mortgage insurance, it protects the lender against the risk of default -- it does not provide any form of financial protection for you. Canceling private mortgage insurance can lower your overall monthly mortgage payment by $100 or more depending on the amount of your loan.

3

Contact an insurance broker or agent to obtain quotes for homeowners insurance. Although mortgage lenders require you to carry homeowners coverage, your lender typically will not force you to carry insurance through a particular company. If your agent or broker can help you obtain the same coverage you currently carry at a lower rate, you can switch insurance companies to lower your monthly mortgage payment.

4

Contact your lender to inquire about a mortgage loan modification under the Making Home Affordable program. If you use the home as your primary residence, are experiencing a financial hardship and currently make mortgage payments that exceed 31 percent of your gross income, your lender can use this program to lower your mortgage payments. A loan modification will also typically bring your mortgage loan current if you are behind on your payments.

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How to Get Rich Quick The Right Way

Learn how to build real wealth

Instructions

1

You need to stop chasing get rich quick plans. The best way to get rich quick is to get rich slow.

2

Your income is what will get you there. You have to commit to living below your means. That means not changing your lifestyle just because you get a boost in income. You must stay away from debt. Just think of what you could do with your income if you were not giving it to credit card companies and banks your whole life. When you spend your hard earned cash use cash. It hurts when you count it out. That pain will help to keep you from over spending.

3

Live on a budget. You need to spend everything you make on paper every month. When you know where your money is going it is real easy to whip it in to shape. You need to make time for this. Once you see where all your money is going you can cut out the extra spending. Loose spending is the best way to stay broke. There are people out there making 100k a year who are broke. All because they don't tell their money what to do.

4

If your are in debt now stop borrowing money! You need to work your way out of debt. We all need to learn how to delay pleasure. Right now we live in an I want it now I'll pay for it later society. We have to break that cycle if we ever want to prosper. One way to get your debts payed off is to list your debts smallest to largest pay the minimums on all but the smallest then send everything you can to the smallest one until it is gone. Once that one is gone take all you were sending on it and start paying it down on your next debt etc. etc. As you move up the latter of your debt you will have a bigger axe to chop it down.

5

Once you are out of debt. All that money you earn is yours to save and invest for the rest of your life. Once you are ready to invest talk to a good financial advisor to help you make your money work for you.

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How Can a Person Send Money Overnight to a Business?

Sometimes you may need to send money overnight to a business. Luckily, there are several different ways that you can achieve this. Some may have fees associated with them, but these will vary. The important thing is to choose a reliable method.

Instant Money Transfers

If you need to send money to a business quickly, you may want to consider a company that does instant money transfers. These companies charge you a fee in addition to the amount of the transfer, but they do the work of processing for you. You also have the option of paying many bills with a credit card this way. Some companies do not accept instant money transfers.

Overnight Delivery Services

If the business you are sending money to will accept a money order, personal check or a cashier's check, you may be able to use an overnight letter delivery service such as FedEx, UPS or the U.S. Postal Service. Compare rates to find out which is the best for you. Then contact the recipient to confirm which address you should use. Often, the address for overnighted checks is different from the regular address.

Obtaining Confirmation

Whether you use an instant money transfer or send an overnight letter, make sure you get confirmation that your money was received. There will be a tracking number or code that you should write down and save.

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