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Payday Loans

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Payday Loans

Postby Tostig » Sat Dec 03, 2016 2:21 pm

I have a few payday loans totalling $830, not including interest. I have paid back more than what I owe in refinancing fees alone. I'm in over my head. $350 is taken directly from my bank acct. every other week. I was thinking about closing my bank account to avoid them taking anymore from me. I don't want to do this if it will make things worse than they already are. Please help!

ANSWER: I don't know what to say other than NEVER USE pay day lenders!

Talk to your friends and relatives...Or Anyone else...  Borrow the money from someone else to pay them off.

Also call your local better business bureau and chamber of commerce and see if there is a consumer advocate in your area that might help.

Stay away from these crooks....

Interest is 300 per year or more, all allowed by our republican masters.

Is debtor's prison in America next?

---------- FOLLOW-UP ----------

Thank you. I know the right thing to do would be to pay them off, but I am financially ruined by them. I live in Massachusetts and my boyfriend told me it is illegal for out of state(which they all are) payday loans to offer them to MA residents. He thinks the best thing I can do is go to my bank and put a stop payment on them. If they take me to court he thinks I would win. Is this a bad idea? The only way I'd be able to pay them off is to take a bigger payday loan to cover them all and then try to pay the one big one back. What do you think?
Tostig
 
Posts: 44
Joined: Sat Feb 01, 2014 6:31 am

Payday Loans

Postby Avrum » Tue Dec 06, 2016 7:32 pm

I have a few payday loans totalling $830, not including interest. I have paid back more than what I owe in refinancing fees alone. I'm in over my head. $350 is taken directly from my bank acct. every other week. I was thinking about closing my bank account to avoid them taking anymore from me. I don't want to do this if it will make things worse than they already are. Please help!

ANSWER: I don't know what to say other than NEVER USE pay day lenders!

Talk to your friends and relatives...Or Anyone else...  Borrow the money from someone else to pay them off.

Also call your local better business bureau and chamber of commerce and see if there is a consumer advocate in your area that might help.

Stay away from these crooks....

Interest is 300 per year or more, all allowed by our republican masters.

Is debtor's prison in America next?

---------- FOLLOW-UP ----------

Thank you. I know the right thing to do would be to pay them off, but I am financially ruined by them. I live in Massachusetts and my boyfriend told me it is illegal for out of state(which they all are) payday loans to offer them to MA residents. He thinks the best thing I can do is go to my bank and put a stop payment on them. If they take me to court he thinks I would win. Is this a bad idea? The only way I'd be able to pay them off is to take a bigger payday loan to cover them all and then try to pay the one big one back. What do you think?
Avrum
 
Posts: 47
Joined: Fri Jan 10, 2014 12:54 pm

Payday Loans

Postby Darius » Sun Dec 11, 2016 12:44 pm

How the Court Helps You Get Out of a Payday Loan

Many people seem to be drowning and trapped by payday loans to the point that they can't pay the rent, or even buy groceries! Many people have more than one payday loan out. How do these situations end? You do not have the money to get out of a payday loan! How does a payday loan spiral end? Here is some information you should know:(I am not a lawyer. This is not legal advice, it may even be "illegal advice!" But I am not responsible for anything that happens to you just by pointing out these facts. Every case is different, every jurisdiction is different.)

1. If you are in collections, you need to find out what collectors CANNOT do! The list will surprise you! If you can show that any collection calls you are getting violate the FEDERAL FAIR DEBT COLLECTION PRACTICES, you should report the collector. Go to the Federal Trade Commission's web site, http://www.ftc.gov/os/statutes/fdcpa/fdcpact.htm . Print out the rules and read them. You will be very surprised what they cannot do, and many people find that collectors are in violation. If you document these calls, you may gain leverage with the payday lenders. Remember! It is against the law to record a phone conversation without tell the other party, and asking his permission to record. Be sure to do this. YOU don't want to break the law, right?(Tip: think up a single response, and just say it over and over and over again no matter what the collector says. Example. "I'm sorry this didn't work out, but I don't have any money now." That way you don't have to think up new answers all the time. Also, the collector will get bored and hang up. Well? If you had the money you wouldn't be in this mess, right? You don't have the money that's it!)

2. Other than the collecting laws, most of the laws about payday loans are handled by your particular state and county.(If you're lucky, you live in a state that does not allow payday lenders to operate!) So find out these facts for your state and your county:

A. How does your county handle bad checks that come from payday lenders. My state is one of the worst when it comes to protecting people from predatory lending practices, but at least my country DOES NOT ACCEPT BOUNCED CHECKS FROM PAYDAY LENDERS! They consider the post-dated checks written to payday lenders to be "promissory notes," not checks! So if you lender mentions he will turn over your bounced check to the prosecuting attorney, he may be mistaken. Several lenders in my county erroneously said they would do this, but when I called the county, boy was I surprised! B. Find out how the small claims court works in your county. For example, in my county, these are the facts: 1. No one(not even a payday place) can file more than 12 cases per year. So, if your loan is not in their Top 12, they may not even take you to court! 2. You do not need to take a lawyer with you; in fact, in my county the judge acted irritated when attorneys showed up. 3. If you do not show up for your case, the other side automatically wins, so you ought to go! 4. All the payday lender has to do is show the judge the contract you signed, and a copy of a bounced check, and you are toast you lose.

C. Here's what you need to check about the rules in the state you live in. 1. When someone garnishes your paycheck, what is the most they can take? In my state, they can take 20 percent from an individual, or, only 10 percent from someone who has dependents. 2. What is the interest rate the state makes you pay when you are making payments in a garnish situation? Where I live, that rate is 9 percent. The average rate paid by payday borrowers is nearly 400 percent! That is a very big difference, isn't it? And that's why you want your day in court! LOSING TO A PAYDAY LOAN PLACE IN SMALL CLAIMS COURT IS THE SOLUTION TO YOUR PAYDAY LOAN PROBLEM! HERE'S WHAT WILL MOST LIKELY HAPPEN:(But caution! Laws vary from place to place, so remember, check out your county and state laws first!)) 1. You will lose, and the payday lender will win. The amount will be frozen. Payday charges and fees will stop. 2. The judge will give the lender a form that he then gives to YOUR BOSS that requires your boss to garnish your pay that is, to take out a percentage, and send it to the lender before you even get your check. Your check will be smaller, but not NEARLY as small as it is when you are trying to pay back the lender on your own! 3. When the debt is paid. You're done.

Then you have ruined credit, right? WRONG! The payday loan industry does not have access to TransUnion, EquiFax or Experion the three agencies who establish your credit rating. That's good news, right?

BANK CHARGES These are killing you, right? The lender keeps sending your check to your bank, and it keeps bouncing, and the bank hits you with a big fat fee. Coming soon: How to make that stop! More good news: There is a new free website that helps you understand how to think like a person who will never need to use a payday loan place. http://moneywhoas.blogspot.com/. Please remember, this is not legal advice! The facts presented here are only a result of my personal experience and research. The facts are true to the best of my ability to verify them, and there are NO guarantees of any kind! Good luck to you! Breaking the cycle of payday loan 'trap' Posted 9/19/2006 10:46 PM ET  

By Kirk Wagner, The(Appleton, Wis.) Post-Crescent, for USA TODAY By Sue Kirchhoff, USA TODAY WASHINGTON — Tellers at the North Carolina State Employees' Credit Union noticed a troubling change several years ago: The first people in line on payday were high-cost lenders, waiting to cash checks from credit union members. A glance at the records showed thousands of credit union customers were turning to payday outlets for small loans to be repaid with their next paychecks. Such products typically carry annual fees of 300% to 1,000%. Many strapped borrowers repeatedly roll over the loans, sinking deeply into debt. To wean its members from payday providers, the State Employees' Credit Union(SECU) in 2001 introduced a short-term loan that has a 12% annual interest rate, a maximum limit of $500, requires borrowers to repay via direct deposit of their paychecks and put 5% of loan proceeds in savings accounts. Each month, more than 40,000 people use the product, which has a maximum 31-day term. Overall, members have accumulated $10 million in savings accounts.

"We wanted to find a way to get our members out of this trap," says Jim Blaine, SECU president. "We have a couple of our vice presidents using it, a vice chancellor of a university. ... It's not just a poor person's product." The SECU is one of a growing number of credit unions now offering products specifically designed to combat payday, or cash advance, lending, which soared in the 1990s even as the nation experienced record economic growth. Payday lending has become a $40 billion annual business(in loan volume) with more than 22,000 U.S. outlets, according to the Community Financial Services Association of America, the industry's trade group. By comparison, Starbucks has 8,624 U.S. locations and McDonald's about 14,000. Mainstream lenders were initially slow to react, but more than 1,000 of the 9,000 U.S. credit unions now have products designed as alternatives to payday loans, says Dan Mica, president of the Credit Union National Association. That includes the Prospera Credit Union in Appleton, Wis., which started a program in a Goodwill Industries thrift store last year after Prospera CEO Ken Eiden noticed people going from the store to a payday lender across the way. Eiden says Prospera has already lent $1 million via the product. Obstacles to alternative loans Still, there are obstacles to alternative loans. Credit union officials fret about the stigma of being labeled a payday lender, albeit a lower-cost one. The SECU's Blaine says his short-term loans are his most profitable product, but Mica says given the poor credit quality of borrowers, many are break-even or community-service products. Federal Deposit Insurance Corp. Chairman Sheila Bair, while she was a professor at University of Massachusetts in 2005, wrote a paper suggesting one reason banks and credit unions may have held back from short-term lending was to avoid undercutting highly profitable, bounced-check protection programs that have become de facto payday protection for some customers — with similarly high fees. And Yolanda McGill of North Carolina's Center for Responsible Lending worries regulators could view credit union competition as a solution in itself, making them less likely to clamp down on payday lenders. She also says the ultimate goal must be to get people out of the short-term loan trap.

In Oregon, regulators say it's not either-or. A state law pushed by consumer advocates that takes effect in mid-2007 puts a 36% annual cap on payday loans. In the meantime, officials are working with such non-profits as Our Oregon and credit unions to promote alternative loans, including putting informational fliers in food bank boxes.

"If all we do as regulators is say, 'We're going to cut back on this, cut back on that,'(high-cost lending) will pop up someplace else," says Cory Streisinger, director of the Oregon Department of Consumer and Business Services. "We want to say, 'Here are some other options.' "

The effort has helped Ruby Stoker, 36, of Junction City, Ore. She and her husband, Ronald, got into trouble after taking out an $800 payday loan that, in a matter of months, morphed into four loans with an overall balance of $2,200. Stoker, who was carrying some loans with annual fees of 800%, now has a 13% credit union loan with a stretched-out repayment plan. "They don't even do a credit check. They just use your paycheck. ... You're done in 10 or 15 minutes," Stoker says. "We're both graduates from college," adds Stoker. "It's not(that) you wake up in the morning and say, 'Let's go get ourselves into debt and bury ourselves to the point where we have to make a choice between paying the rent and eating.' "

The country has a long history of high-cost lending. There are a variety of theories for the recent growth, from banking deregulation to savvy marketing and consumers' desire for convenience. Mica expects there will soon be more than 40,000 payday outlets.

A typical payday product might be a two-week loan for $200 with a $30 fee, which translates into an effective annual percentage rate of 390%. Lenders provide immediate cash in return for a postdated check for the loan plus the fee, often with no background credit analysis.

Steven Schlein, spokesman for the Community Financial Services Association, says that borrowers often choose payday lenders to avoid high bounced-check or credit-card late fees from mainstream lenders, which can be as pricey as some of their products on an annual basis. He said the industry hasn't felt much impact from the credit union products.

"Only a few credit unions to our knowledge are offering two-week loans at low denominations," Schlein says. "We encourage them to. We're an entrepreneurial business who operates in a free market."

Research cited by Schlein's group and other analysts indicates many payday customers are repeat borrowers. For example, the Washington State Department of Financial Institutions, based on a voluntary survey of 66% of the state's payday lenders, found about half of borrowers took out six or more loans in 2004 and 25% took out a dozen or more. States are cracking down on payday lenders, imposing fee caps and limits on the number of loans a borrower can have. The Department of Defense wants a 36% annual limit, given huge problems with payday lending near military bases.

Lenders, in response, are finding ways around the tougher rules. In Oregon, some payday firms have applied to switch to a different form of charter to circumvent the new law. State officials may also have to ask the Legislature for action to regulate Internet sales of payday loans.

Credit unions face challenges The Filene Research Institute is working with credit unions in Ohio, Maryland and Wisconsin to design alternative loans and will expand into 10 more states next year. It is also encouraging credit unions to offer check cashing, international wire transfer and other services now offered by high-cost firms, along with credit counseling. "Payday lenders stepped in and built a niche very nicely, but very expensively," says Lois Kitsch of the Filene Research Institute. "Credit unions have a very difficult time ... because they have a very real problem lending to get people from paycheck to paycheck."

JoAnn Johnson, chair of the National Credit Union Administration, says regulators support the efforts. Some consumer advocates, while applauding the moves, say credit unions have been slow to meet the needs of their borrowers, especially given their tax-exempt status.

"Their mission for being created was primarily ... to serve people of modest means. The larger ones have gotten off track," says John Taylor of the National Community Reinvestment Coalition, who argues credit unions should be subject to federal rules requiring banks to reach out to underserved areas.

Banks are making some moves into the area. James Ballentine, director of community and economic development at the American Bankers Association, says there may be more movement once several banks get going and build data on "whether you're really going to be chasing people down for $200." SECU's Blaine dismisses talk that the products are financial losers.

"This is the most profitable loan product that we offer. That's the first myth that you'll hear other lenders offer," Blaine says.

Blaine has a PowerPoint presentation showing that at a 12% interest rate and 4% default rate, the SECU makes a healthy 2% on its cash advances. In reality, he says, the default rate is far less. "We don't put that in there because people don't believe it."

With 40,000 people using the program monthly, the SECU became the largest payday lender in the state. It modified the program in 2003 to require that 5% of loan proceeds go into savings. The idea is that after 18 months, borrowers will set aside enough to pay off the loan. Ora Houston, 50, of Trotwood, Ohio, was in such bad financial shape several years ago she was even turned down by a payday lender. She tried the Wright-Patt Credit Union, which has a payday alternative, and got the $250 she needed. "I was about to lose everything, totally everything. I went to a lot of financial institutions, and they turned me away," she says.

Doug Fecher, CEO of Wright-Patt, says Houston got a loan requiring little in the way of a credit check and carrying a $35 annual fee. By reporting her payments, Wright-Patt helped Houston build a credit score and secure a $1,000, no-fee line of credit.

Counseling's not 'preachy' In Appleton, Eiden's Goodwill product charges a $9.90 fee per $100, which translates into a more than 200% annual rate. After the third loan, borrowers get a voucher for free counseling and opportunities to consolidate and pay off previous loans. The program offers check cashing, money wire transfer and other services. Five dollars of the $9.90 fee covers defaults.

"You can't be preachy. After having established a rapport with(borrowers), we try to talk to them about how their financial futures could be different," Eiden says. About half his borrowers should be able to get on a better footing, Eiden says. Others have chronic problems and may be surviving on Social Security or disability payments. He is working with area social service agencies. For example, some borrowers who were taking out payday loans for prescriptions are going to a free clinic.

Asked whether demand for his product will wane given North Carolina's crackdown on payday outlets, Blaine gives an emphatic "no." "People are so embarrassed to talk about their finances, they think, 'I'm the only one that ever had a late payment,' " Blaine said. "It's not an exception. The normal thing is living payday to payday."  
Darius
 
Posts: 41
Joined: Mon Mar 31, 2014 5:36 pm


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