What can a payday loan company or collection agency legally do if you cannot pay your payday loan debt. They make so many horrible threats, but does anyone know what they can really do? Any experiences?

sharimeri-

I too am having the exact problem that you are experiencing. This site has been so helpful, it has allowed me to know what to do. Who have you been contacted by? That's a start, then you will know the right forum to go to for more info.

500cashnet and Certified Recovery Systems - know anything about these two?

[stella]

Payday lenders will first start calling you all the day. Threat of an arrest, legal charges for check fraud and so on. They will call at your work, try to withhold your wage using the power of voluntary wage assignment (which is often authorized by digital signature, hence invalid), call your references and so on. Then they will send it to collection. Now collection agency will start doing the same thing.

Now most of the payday lenders do not report to none of the EQ, EX or TU, they report to Teletrack. But if your lender sells your account to a debt buyer they can report to major credit bureaus and non-payment will hurt your score.

I have heard that store front lender sued debtor, but never heard that an online payday lender brought legal charges for being default. Moreover, there are doubts if the online payday lenders are licensed to do business in your state or not. That could be the reason they refrain from legal activities.

However, if you owe the debt, try to pay as much as you can. All the states have a certain usury law. Follow it. If your lender is charging interest or fees more than what your state permits, file complaint against them and pay what you lawfully owe.

Browse this forum, search for the posts of The Payday Loan Avenger and pollyandsay. Both of them have done extensive research on online payday loan laws. I'm sure you will find it useful.

Even though you borrowed the money from payday loans, all they can do is take you to court and sue you. They can't arrest you for fraud and here in Georgia payday loans are illegal. Got myself messed up with these folks and had to cancel my bank accounts, they were getting more that what I borrow from them. So in essence I more or less told them to kiss my foot and also told them I was taking them to court for being crooks. So far they have left me alone, until this outfit from Interstate Wire Compliance Bureau, another fraud.beware of these folks.

[Jenn]

I went through this very same thing. Here's what I did: Close your checking account immediately. You will be out more money the longer you keep your account open. Don't let them charge you more fees than allowed by law. Pay what you owe and reasonable fees and nothing more. After you close your account, the payday lenders will start calling you and asking you to set up payment arrangements to pay the debt. Only set up arrangements you can afford. Figure it out before they start calling so you are prepared. If they are unwilling to make arrangements then let it take its course. Some will simply send you to collections where you can deal with (mostly) legitimate collections agencies who will send you a collection letter. Send a cease and desist letter and dispute the validity of the debt immediately. I had many payday loan companies send me to collections. I disputed the debt, requested original copies of the applications with my signature, and surprise surprise, they couldn't verify it and were forced to stop collection activity and remove info from my credit report. BUT they will then resort to more forceful tactics to get you to pay. They will have collectors call and threaten arrest, etc. KNOW YOUR RIGHTS. A third party collection agency must send you notification in writing that they are attempting to collect a debt. They must verify that debt if you request them to do so, and cannot proceed on attempting to collect the debt until they've verified it. Therefore, if they don't verify, they can't collect. A good way to tell if a collection agency is legit is to ask for their address and ask for them to send something to you in writing. If they refuse, then hang up. Do a reverse search with the phone number on the internet or come here to find out who they are. If you are able to find an address, send them a cease and desist letter. This has worked for me before as well. The most important thing to remember is that most of these payday loan companies are not licensed to do business in your state or are violating state laws in their lending practices. That's why they resort to threatening arrest for non payment because legally, many of them have no way to make you pay. Make sure to keep receipts of all your payments because often times they try to say you didn't pay as much as you did or say they never received payment. Then you have proof that you paid and it's not your problem, its theirs. I never got sued but some did attempt to garnish my wages. I think that's about all they can attempt to do but that won't even work. In most states, voluntary wage assignments (which is what they are in payday loans) are revocable if put in writing. Just put it in writing that you are revoking your wage assignment, mail or fax it to them, and give a copy to your payroll person at work. Then they can't take any money. The only way for them to get another wage assingment (in most states) would be to take you to court, which they will not do because they are in violation of so many laws they know they'll never recover. Be patient. You'll get through it. I know I though I was ruined and I felt like the stupidest person in the world but it will get better. Read through some other posts on here and you will see that there are many of us that have fallen prey to payday loans and it has all worked out in the end.

[jj]

jhimmelein, your advice is right on the head of the nail...

Also if you live in a state that requires that payday lenders be licensed, and you have internet loans from companies not licensed in your state, you can make them go away usually haveing them accpet what you haev paid to date as payment in full, and in some cases getting a refund of some of the fees you have paid.

[truwoman31]

How do you go about finding out if they are licensed in your state?

[Jenn]

Every state is different but usually a legitimate business will register their business with the Secretary of State. If their principal place of business is in particular state, they will register their Articles of Incoporation in the state the business is formed, and if they do business in additional states, they will register as a foreign company in that state as well. This is done to protect them in the event of a lawsuit. I believe that there is another place that banks and lending institutions are supposed to be registered at but I'm not sure what it's called. Someone else may know... When I was going through this, none of the payday lenders I dealt with were registered with the state I live. If you are dealing with payday lenders where you actually go to their stores, they are generally registered with the state. It's the internet payday loan companies that are usually not registered. Just be vigilant. Read the Fair Debt Collection laws so you know what collectors are and are not allowed to do. If you are a contacted by one of these companies threatening arrest, etc., report them immediately to the BBB in your area and the FTC. Both have complaint forms online or phone numbers that you can call to report the company.

[jj]

check with your state attorney generals office and perhaps your state department of financial instituitons

[set4sail]

truwoman31, according to the state you live in, you may be able to look up licensing information on the internet.

After days of research, I've found no internet lenders that were licensed in states other than maybe the one they were physically located in. Now, I'm not saying this is true for all, but for the 10 or so companies that I looked up there was no licensing information with the states that have an online database.

If you would like to pm me with the name of the state you live in, I can help you find the licensing info.

Dana

i had the same guy who called me twice, mr. Lowe who threatened to file a police report and have me locked up, then mr. Edwards (who was mr. Lowe) said he was from the district atty. office and said he was going tove me one more chance, i dont return phone calls to people who are liers!

Just a quick question about being licensed in your state. Do you know if Washington State requires such licensing for out of state payday lenders? Thanks!!

[LCW]

If state laws require lenders to be licensed in that state, they must be licensed no matter what. Even if they have no physical presence in that state. The law of the consumers state of residence have preference. Therefore if State law requires lenders to be licensed, then out of state (often referred to as Foreign Corporations) must also be licensed.

[jj]

Washington state licenses payday lenders and the state takes the legal position that this applies to internet lenders as well. They are regulated by the Washington Department of financial services.

Thanks for the info!! That helps!