Have you ever taken out a payday loan? If you have then you know that it should always be a last resort as the interest rates are such that you will pay the loan back threefold. But there are many who default on payday loans some because they do not have the money to pay it back and others because they do not want to pay the loan back. But what happens to you when you fail to pay back your payday loan?
What is a payday loan?
A payday loan is a type of loan that you can use to cover bills until your next payday when presumably the loan would be due in full. Some cannot afford to pay the loan in full, because they are loaning their entire check as the case may be. In those circumstances installment plans are offered to pay back the loan, but this is a costly exercise and means that you will sometimes pay triple what you borrowed. You may be asking yourself what happens if I don’t pay back my payday loan? There are several things that could happen if you don’t pay back a payday loan and here are a few of the scenarios that you may face if you default on the debt owed.
The creditor will take what they like
As part of the agreement for a payday loan, you have to give the creditor or the lender access to a bank account from which they can withdraw the funds that you owe. If they cannot withdraw the funds, you will end up with an overdraft fee and they will continue to try to take the money from your account regardless of previous failed attempts until they get the money back. Moreover, depending on the contract you signed you may have fees added due to non-payment or even have extra interest added to the amount you owe. Do not let the situation spiral out of control, seek help immediately.
They will turn you over to a debt collector and you will have no payday loan debt relief
After drowning you in overdraft fees, a barrage of phone calls will begin. Threatening demands will be made of you in order to obtain the amount that you owe and you may even receive letters or visits to your home from creditors looking for the money owed.
You will be given the chance to make a deal
Once the debt has been turned over to a collection agency, you will be offered the chance to make a deal to start paying back the debt that you owe. This is often called an installment plan or a payment arrangement and the payments will go based on income. If there is no way that you can pay the debt owed then you should look at Payday loan debt consolidation or debt management programs. Payday loan debt management programs offer you a lower payment rate and even less interest, if the creditor is willing to agree to a lower interest rate.
If you can’t pay, ask for help with payday loans and get payday loan debt relief
There are several companies out there who offer payday loan debt relief. With their help, you too can get a payday loan debt settlement and get the relief you need with a payday loan debt settlement. These programs are based on your income and the company’s ability to negotiate a payday loan debt settlement with your creditor.
What Happens if I don’t pay back my payday loan, will I go to jail?
We do not have debtors’ prison so you will not go to jail because you cannot afford to pay the money back. Some creditors may threaten you with jail but that is illegal and they should be reported to the police if they do that.
What Happens if I don’t pay back my payday loan? You may have to go to court!
Payday loans come under the civil courts. You may receive a summons to court by a creditor or the debt collection agency who has received your file and is pursuing the money that you owe. It is important to not ignore a court date because you will be seen as hostile and the judge can order a garnishment of your wages to pay the money back. You should go to court and plead your case and make a deal if you can or tell the judge that you are without means to pay what you owe. If you are bankrupt, then you do have protection from payday loan collections. The judge may order you to work with a payday loan debt relief company to make a plan to help with payday loans.
The debt will ruin your credit, get help with payday loans
If the creditor reports to a credit bureau that you have defaulted on a loan then it will ruin your credit. So please consider working with a payday loan debt relief company to sort the matter out before it’s reported to a credit agency and ruins your credit. You don’t know what the future holds, and you may need to buy a new vehicle or a home and if your credit is ruined then you can kiss that dream goodbye. Most debts stay on your credit file for seven years before dropping off.
Where to from here? Get help from a payday loan debt relief company
If you find yourself in this predicament, then you need to seek out help. Here at nationalpaydayloanrelief.com we can help you make a plan to get out of debt and out from under the thumb of the payday loan companies who are hounding you for money you don’t have. Your friends and allies at will help you get out of debt with a tailor-made plan to help you consolidate your payday loans and get you into a manageable payment schedule.
Do not be afraid to seek help, and never try to go it alone. We can get you lower interest rates and even have some of what you owe reduced or eliminated. We are here to help you and want to see you living your best life; a debt free one!