Buried In Payday Loan Debt? How to Stop Collection
Learn how to Stop Payday Loan Collection. Get answers to the most frequently asked payday loan questions. So you needed some quick cash to cover an emergency or unexpected car repair, rent, make a car payment or pay some other debt to avoid high cost penalties. These are all legitimate reasons for taking out a payday loan in Utah. As long as you repay the payday loan quickly, the loan can be a useful tool. However, because these loans are easy to secure (most payday loan providers do not check credit and charge high fees and interest) many borrowers find themselves unable to repay their payday loan as planned and incur interest and fees that often exceed the original amount borrowed. Know these facts if you find that you are having trouble repaying your payday loans.
- What If I Am Unable To Repay My Payday Loan in Utah?
- How Do I Stop A Payday Loan Automatic Payment?
- Can I Go To Jail If I Cannot Pay A Utah Payday Loan?
- Can A Payday Loan Company Garnish My Wages?
- Does Closing A Bank Account Stop Payday Loan Collection?
- Can I Consolidate My Payday Loan?
- Bankruptcy Can Eliminate Payday Loans.
- How Can I File A Complaint On My Payday Loan Company?
Starting fresh starts now.
What If I Am Unable To Repay My Payday Loan in Utah?
If you are unable to repay your utah payday loan, it is important to know your rights. Statistics reported by the state of Utah indicate that less than 20% of payday loans are unpaid and default. It is reasonable to communicate with your payday lender if you are going to miss a payment as agreed. The lender generally does not want you to default, they want their money and interest. The cost of collecting a defaulted loan is high and that is compounded by the hassle factor for the lender of going through the collection process. Of course, the cost of collecting on a defaulted loan is built into the high interest charges and the lender will likely pursue collection action and report the default to the credit bureaus which will negatively impact your credit. If you are in default and the payday lender, it is important to know that in Utah the payday lender is prohibited by law from making threatening or abuse collection efforts. For instance, your payday lender cannot threaten criminal action against you if your check for payment is returned for non-sufficient funds. Also, if a payday loan is made in Utah by a non-registered lender, the loan is void and noncollectable. Know your rights, Start Fresh Utah can help
How Do I Stop a Payday Loan Automatic Payment?
You can stop a previously authorized automatic payment (“ACH Authorization”) on your payday loan in Utah. Most payday loans will have this authorization as part of the loan package. Under federal law, a payday loan cannot be conditioned on securing an authorization from you for ‘‘preauthorized’’ (recurring) electronic fund transfers, but it does not stop them from making it look like you must accept that repayment method. By initialling or signing an ACH Authorization as part of the loan agreement, you are granting access by the payday lender to your bank or prepaid card account to automatically to secure a payday loan payment when it comes due. You have the right to revoke this authorization. Here is how:
- Notify your payday loan company in writing and with a telephone call (record the call, if possible) letting them know that you no longer grant permission for them to take a payment from your account. This is commonly referred to as “revoking authorization.”
- Notify your bank, credit union or prepaid card provider via telephone and in writing that you have revoked authorization for the payday loan company to take any payments from your account. Your bank may have an online form that you can use for this notification.
- You can also give your bank a “Stop Payment Order” to keep the payday loan company from taking a payment from your account. You should give this order to the bank at least three business days before the scheduled loan repayment date. You can make this order in person, via phone or in writing. Note that your bank may charge a fee for this service.
- Make sure that you monitor your accounts for any unauthorized payments made. Notify your bank immediately that a payment was made, but was unauthorized per your instructions. As long as you have given the bank notice, Federal law allows you to get your money back for unauthorized payments.
Remember, even though you have cancelled payments to the payday loan company, you have not cancelled your contract and you are subject to collection efforts by the payday loan lender.
Can I Go To Jail If I Cannot Pay a Utah Payday Loan?
Maybe! You cannot go to jail or be arrested for not paying your payday loan in Utah; however, you can be arrested and go to jail if you miss a court hearing that requires your participation. In Utah, payday loan companies are very aggressive in their debt collection practices and use the small claims court to obtain judgments and bench warrants against borrowers who fall late on payments. If the borrower does not show up for the court hearing regarding the repayment of the loan, the payday loan company can be awarded a judgment for the amount borrowed, interest accrued, late fees and collection costs. The payday loan company can request that a bench warrant be issued on the borrower which will have a fixed bail amount. The warrant will then be served on the borrower (typically by a constable) and, if the bail amount is not paid at that time, the serving officer can arrest the borrower.
To avoid the issuance of a bench warrant, it is imperative that you adhere to the court procedure and appear in court when summoned. Never ignore a court order to appear in court. You may wish to consult legal counsel to help you with your court appearance. Also, if your payday loan company threatens to have you arrested, they are violating the law. You should record all calls that you have with your payday loan company, if you feel threatened. Many payday loan companies are very aggressive with collection calls and regularly violate your rights. If you receive abusive collection calls or threats from your payday loan company, you should report them to the State Attorney General, the State Regulatory Authority and the Federal Consumer Financial Protection Bureau. See the links below to file your complaint.
Can A Payday Loan Company Garnish My Wages?
A payday loan company in Utah can follow the proper collection procedure and obtain a Writ of Garnishment that will give the payday loan company the right to serve the Writ of Garnishment on your employer. Your employer will begin garnishing your wages pursuant to the writ of garnishment. See our post “Stop Wage Garnishment in Utah” for more detail on wage garnishment. You may be able to renegotiate your payday loan with the payday loan company or qualify to eliminate your payday loan altogether. If you find that you will not be able to make a payment as scheduled on your Utah payday loan, contact Start Fresh Utah to get assistance.
Does Closing My Bank Account Stop Payday Loan Collection?
If you close the bank account on which you have given your payday loan company post dated checks or an ACH Authorization to take payments automatically from your bank account, then the payday loan lender will not be able to secure payment. This does not stop them from pursuing other methods of collection, including suing you to obtain a judgment. If a payday lender sues you for non-payment of your payday loan, they have a good chance of being awarded a judgment that will enable them to garnish your wages or seize certain property that will be sold at auction to repay their loan. Contact Start Fresh Utah if you are facing difficulty with a payday loan. We may be able to help you find options that can help.
Can I Consolidate My Payday Loan?
If you have more than one payday loan, you may be able to consolidate the multiple payday loans into one. If you can qualify for a debt consolidation loan, then it may be better to pay off the payday loans with the new debt consolidation loan and reduce your number of payments and possibly save on high interest and finance charges. Unfortunately, a debt consolidation loan is not realistic for those who have multiple payday loans due to credit problems. Consequently, a conventional debt consolidation of multiple payday loans is not common. Beware of the many companies that advertise debt consolidation loans, but are really steering you to a debt management program or debt repayment plan. These programs may provide relief from multiple payments, but are often risky and ineffective.
Debt consolidation companies that advocate debt management plans are rarely successful for those struggling with multiple loans because the borrower is too overextended and will not likely succeed with the plan. The fact is that if you enter a debt management plan or debt repayment plan, it will be reported on your consumer credit file and you will be classified as a bad credit risk and will be treated as if you are bankrupt. If you have multiple payday loans and/or other unsecured debts, like credit cards, then contact Start Fresh Utah to learn of your debt elimination options by leveraging the bankruptcy laws to your advantage. After a thorough review of your case, we may determine that you feel that the most efficient way for you to achieve financial peace of mind is to eliminate your debts now, rather than struggling for years in a debt consolidation plan that ends in a bankruptcy anyway. Start Fresh Utah can help you determine what feels right for you.
Bankruptcy Can Eliminate Payday Loans.
No one wants to file a bankruptcy. The reality is that most people do not understand the bankruptcy rules and avoid learning about the valuable option it might provide to stop payday loan collection. The fact is, a properly filed bankruptcy can provide a struggling borrower with a chance to get back on track and Start Fresh. Bankruptcy, in certain circumstances, is the best option for those mired in debt. Depending on your financial state, bankruptcy can be used to eliminate your payday loans and other debts completely, or provide a reasonable payment plan through the courts that can get you back on track without the hassles of dealing with creditor harassment. To see if you may be able to qualify for eliminating all or a portion of your debts and silencing the creditors and their aggressive collection efforts, contact Start Fresh Utah to explore your options.
How Can I File A Complaint On My Payday Loan Company?
If you have been experienced abusive debt collection attempts or been threatened with arrest by your payday loan company, you should immediately file a complaint with the following entities:
Utah State Attorney General (801) 538-9600 http://attorneygeneral.utah.gov/
Utah State Regulator: Utah Department of Financial Institutions Address: 324 South State Street, Suite 201 Salt Lake City UT 84111 Phone: (801) 538-8830 Fax: (801) 538-8894 Website : http://www.dfi.utah.gov/ Complaint Instructions
Consumer Financial Protection Bureau (855) 411-2372 https://www.consumerfinance.gov/complaint/
Contact us and know your options. Starting Fresh Starts Now.