Defaulting on Payday Loans Can Take You Further Down South
Defaulting on payday loans may not send you to jail, but it can certainly attract more challenging consequences. When lenders find you defaulting on payday loans, you can be sued for sure, but as per the provisions of FDCPA, unfair, abusive, or deceptive practices cannot be adopted by the lender to recover the debt. The FDCPA further prohibits the lender from even saying that you could face arrest.
Despite these provisions, if a collection agency or a payday loan lender threatens you for defaulting on payday loans, you can sue them in a state or a federal court within one year from the date that the FDCPA violation occurs.
Does this mean that you go scott free after defaulting on payday loans? Essentially not, and there are stiff consequences to follow.
High interest charges will keep mounting when defaulting on payday loans and this will further impact your personal finances and drive you deeper down the hole. The lender is also entitled to file a suit against you to recover the loan through methods like drawing on your wages or real estate.
Defaulting on payday loans will also adversely affect your credit score and therefore, when you are faced with a situation where payday loans become a monthly routine, you should explore other options like a personal loan, or perhaps try to build up your savings account instead.
Instead of defaulting on payday loans, you can consider a payday loan consolidation agency particularly when you have multiple pay day loans staring you in the face. Such agencies will engage in the task of negotiating with all the payday loan lenders for a reduced interest rate to make the repayment possible. The payday loan consolidation agency will then offer you a monthly plan for repayment through a single window operation. In most cases, you will also enjoy the benefit of late fee waivers.
Before exercising the option of a payday loan consolidation agency, you should understand the cost of services provided by the agency and the corresponding financial benefit that you are likely to derive from the exercise. What is even more important is that if you have gotten into a situation where you are defaulting on payday loans, your personal finance will need urgent attention to prevent a major collapse. Exploring means of augmenting your income through freelance jobs or part time jobs using the power of the Internet is a viable option you should consider. Repairing your credit scores and bringing it back to those 3 digit respectable levels is a sheer necessity to survive these hard times as an American citizen.