Should I close my checking account and open a new one

Hi Lori

Welcome to the forums.

Payday loans seems like an easy solution, but instead one ends up paying back more than double than what was borrowed in the first place. It is such an easy trap to get involved in though.

Closing a checking account won't be that much helpful as the loan amount will keep on increasing tremendously. I suggest you to pay if it is possible from your end instead of leaving it aside.

Borrowing $500 seems to be an easy solution, but then, when the times comes to pay back that money two weeks later, it becomes impossible. One is required to pay the fee in order to extend the loan and this causes a lot of problems in paying the bills. Further there are expenses on transportation and food, which results in borrowing from another lender and so on, fully engulfing in the payday loan trap.

It is extremely important that we all work to educate teenagers and young adults the importance of staying away from payday loan companies and using all credit wisely, so they don't end up in trouble.

Regards
Roxette

Thank you so much for replying. I acutally WANT to repay the loans...I am just going to have to do it over time.

Lori,

Close the account. And open a new one. Most firms dont keep piling on charges. If you keep your current account open there will be no way for you to keep current. If you close your account you can take the money you are paying in bi-weekly charges and pay them off 1 by 1. I know Roxette suggests sucking it up and paying it now, but reality is reality. I just had one of the loan companies call me and offer a settlement of the original amount of the loan and dropped the charges.

Yes, you will have to deal with some collection calls, but you need to take care of yourself.

No you cant be arrested either. The US outlawed debtor's jail in the 1800's

I also got in over my head with a bunch of payday loans. I contacted the companies I owed about the outstanding balances. Some worked with me and discontinued debiting my account, others would not. I contacted debt consolidation on this website and they put me in touch with a company that is working on the other companies. They did sugguest that a do stop payments for the companies that would not stop debiting my account. At my bank a stop payment of a ACH costs $25 and is good for 6 month. So for 6 months they won't be able to debit from my account. I have definately learned a hard lesson. I definately want to pay my debts, but made some really poor choices. I also have learned a valuable lesson. Pay day loans are not for me!!

Just in case anyone is thinking about getting a payday loan. In the last year I have gotten 10 payday loans totaling $2800 and ranging from $350 to $200. Paid $6882 back and still owe balances on all but 3 of the loans. I am working with a company to consalidate the remaining loans, but it will probaly really hurt my credit. So please learn from my mistake and stay away from them!!!!!

Some of us may be looking for some short term loans. I will suggest trying the following:

• You can take a small loan from a credit union.
  
  
• You can also ask for some pay advance from your employer.
  
  
• You can borrow money from family or friends. Make sure that you do it in writing.
  
  
• You can use a credit card advance.
  
  
• When you take a loan from your creditors, you can request for some additional time from your creditors while paying the bill
  

I also got myself in over my head with payday loans. I contacted the payday lenders and requested that they stop taking payments out of my checking account, but they continued to do so. I tried stop payments but they then broke the amount to be debited into differnt amounts, so the stop payment would not work. I contacted my bank about closing the account and was told that if the payday lenders ran payments through within 30 days of closing the account then the account would automatically re-open. I didn't know what to do, so I stopped using the checking account, but the payday lenders continue to try to take money out and the nsf fees continue to accumulate. I went to a debt consolidation company and was told they could do nothing until the loans default. I've called the payday companies to try to make payment arrangements and they are unwilling to work with me and will continue to hit my checking account. It's an ugly cycle.

RlLK

You are quite in a tough situation while handling the payday loans. But you should get in touch with your bank and arrange for some suitable alternative. Adding all the NSF fees is increasing your total debt amount.

You should also contact your lenders and insist on arranging a payment plan. Advance them some money so that they are convinced that you are willing to pay your debt. I hope when your financial situation improves, you will be able to pay more towards your debt.

My bank left the amount on the stop payment blank, that way all of the debits from that company would stop for a 6 month period.

I called my bank and over the phone they closed my account and opened another one.I gave them the information on any checks that were ok to clear on my new account once the balance of old account was transfered.I didnt even have to go to the bank,and they closed my old account immediately.I called my payday loan people and made payment arrangements,which they seem more than happy,that I wanted to still settle my debts.It will still be hard to pay alot to them,but now I can pay my rent,and other utilites without worry of nsf charges.I still feel stressed since I still have over 2000 to pay these payday loan people,but I do feel more in control of my situation.It will be a long hard winter in my house this year,but by this time next year,I feel I will be out of this mess.My daughter will be a senior in high school next year,and I want it to be the best year for her,with no worries about where the money will come from for her needs.

i want to know what will happen in the state of missouri to me since i've had to stop paying my payday loans and closed the checking account

Kat

Your lender will contact you after they realize that money is not getting transferred from your account. Expect them to be a bit hard while attempting collections. It is their money and they will try every ways to recover it. If they are unable to collect the money from you, they might drag you into some legal actions or sell the debt to a collection agency. Thereafter, the collection procedure might even become severe.

All you need to do in order to avoid such embarrassments is to contact your lender at the first place. Explain the circumstances which forced you to close the account. After realizing the hard times that you are going through, they might extend some time in repaying the money. They might not even charge interests for it. They need to feel that you will surely pay the debt to them before any benefit is extended to you.

Contact your bank and let them know what's going on. I did this with mine and closed my checking account to avoid all the other fees involved. I told them the circumstances and that the vendors were aware of the situation.

i took out several payday loans, ranged from 100-150, and i still havent had the chance to pay them back.. i borrowed the money about 7 months ago and now they are harrassing me and telling me i was going to go to jail over this non-sense.. i did my homework on the internet about payday lenders, and the only thing they can possibly do to you, is take you to court for civil remedies as in suing you. they can not arrest you, makin a payday loan is a civil matter not a criminal one. and after they take you to court, if you do not make payment arrangements with them within 30 days, they will try to garnish your wages, but if you are on welfare, ssi, un-employment benefits they can not garnish them. other then that, they cant do nothin but just harrass you.. i suggest making some type of payment agreement with them, if they are not willing to, then dont loose sleep over it! like i said its a civil matter not a criminal one!!

Ash, as you are well informed on handling the payday loan lenders, I hope that you are able to take care of your accounts also properly. Do not fear what the lenders say. They just can't send anyone to jail. In fact, they really can't do as long as you are making some payments towards the account. Sometimes, they force to make larger payments but that can be negotiated. If some of the lenders sound harassing (which is against the law), you must report them to the local AG's office. They should be informed about the activities of the lenders in your state so that others dealing with this company in the future are aware of their nature of dealings.

It's always good to close out you account. However just beware that they will start calling like mad. Make sure if you do decide to close your account just remain in contact with them and let them know your intentions.

If you don't call them and ignore there calls they well get nasty and rude. They know how to stay things to stress you out and furthermore they will threaten with all kinds of legal things just to make you scared and give into to them. They will call your job and try to harass you there also.

So just stay in contact with them and let them in on every step of the way and everthing will be fine.