If you have fallen into the vicious and unending loop of payday loans, you have likely considered getting help from a payday loan consolidation company. You take the time to get a foothold in your finances against the payday lenders by researching online for a reliable company, have completed all of the necessary paperwork and you are ready to take the leap back into control. After all this work your payday loan providers issue the statement that “We are not able to work with payday loan consolidation services.” This can make anyone feel completely out of control and hopeless.
There are some people that feel completely deflated at this point and throw their hands up in frustration. The fact is, however, you need to determine whether or not this is a true and accurate statement. After all, if no payday lenders are willing to work with consolidation companies, why are they even in existence – and growing?
Here are the three top reasons that the payday lenders that you are using will eventually give in and work with your payday consolidation service.
Number 1: Closure of Your Bank Account
The very first thing that your payday loan consolidation service will tell you to do is close the bank account that your payday lender drafts payments from. Even through your consolidation will send a document to the lender that revokes their right to draft your bank account automatically, it is essential you completely close the account to ensure that no unauthorized charges take place.
Number 2: Sending Cease and Desist Documents
Once you decide to work with a payday loan consolidation service, they will send documents for your lenders to eliminate any further communications directly with you. In accordance to the Federal Trade Commission, your payday lender is required to follow certain regulations when they are attempting to collect a debt. If they do not follow these rules and continue the calls, they can be fined up to $1,000 for each phone call that is made.
Number 3: Risk of Being Sued
There are many people that are worried if they do not continue to pay on their payday loans, they will be sued. However, a large number of the borrowers also do not understand that payday lenders (especially ones passed off of the internet) do not hold a license to actually lend money to people that reside in the U.S. This means that they are not able to take their non-paying or late customers to court for the balance of the payday loan.
Now if you think about the situation for a minute, you should come to three very significant conclusions:
- Lenders are not able to debit your bank account;
- Lenders are not able to call you for the money you owe;
- Lenders are not able to sue for the balance due.
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When it comes to debt relief there are certain things you should know and understand prior to pursuing these services. There are many companies that are simply trying to scam you out of money, with no real intention to help your situation. If you are aware of what you should be looking for, you can avoid the scams that are present. First of all, you should know there are certain things that no debt relief agency can promise, and actually deliver on. You should use caution if any of the following requests occur:
- Wants to charge and collect fees prior to actually settling your debt or entering into a debt management agreement with you.
- Pressures for contributions to their company, which actually means fees.
- Talks about new government programs to help you with credit card debt.
- Guarantees to make all of your unsecured debt simply go away.
- Suggests that you cease communication with creditors, without relaying the serious consequences that may result.
- Promises that they can accomplish pennies on the dollar for all of your debts.
- Requires you to provide personal information for free services, such as information on the services they provide.
Remember, if it sounds too good to be true, it probably is. Debt relief works, however it is not a magic cure that happens with no effort. Some other scams to be aware of include advance fee loans and credit repair clinics.
Advance Fee Loans
These are loans guaranteed by a debt relief company that requires a fee in advance. This fee can be anywhere from a couple hundred dollars, to a couple thousand dollars. You should not explore this option, as many of these programs are illegal.
Credit Repair Clinics
A credit repair clinic is the latest name for companies that are basically preying on consumers with poor credit histories. They make outrageous claims such as cleaning up credit reports for a fee. The fact is that anything these companies can do, you can do yourself. If a negative item is correct, no one can remove it from your credit history.
Instead of running the risk of paying fees to companies that are offering illegitimate or illegal services, you should opt for a family run business who has years of success in the field, such as Be Free Financial. Their services will provide you with real information, answers and debt relief options.
There is nothing scarier than debt collection calls and letters threatening legal action. However, there are options to handle these collection notices. Be Free Financial offers services that are completely legal and will help you achieve financial freedom. There is no reason to risk your financial health with a company simply trying to take more of the money you do not have to spare. Instead, opt for a real offer, such as debt consolidation or debt settlement. This will help you reduce your interest and payment handles into a manageable amount that will still allow you to pay for day to day expenses.
If you are having trouble paying your bills and making ends meet, you can take heart in the fact that you are not alone. Many Americans have faced a financial crisis of some sort at some point in their lives. No matter the cause, it financial stress can become overwhelming. However, there are steps you can take to prevent your financial situation from going from bad to worse.
There are several options to consider, including self-help. There are steps that you can take to limit your spending, develop a budget and climb out of the debt you have created. However, you will have to be dedicated and willing to give up some things you may have become used to. Use the following tips to help yourself out of chronic bad debt.
Create a Budget
This is perhaps the most important step when you are trying to reduce the amount of debt that you have. You need to sit down and realistically access your financial situation. To do this use the following steps:
Step 1: List any sources of income you have. This is your working amount of money. If you spend over this amount you will only be adding to your debt.
Step 2: List your fixed expenses. These are the expenses that are the same each month. Typically this includes your rent or mortgage, vehicle payments and insurance costs.
Step 3: List the expenses that will vary from month to month, even if they seem insignificant. This will include food, entertainment, clothing and other expenses that have not been listed.
Step 4: Evaluate all of your expenses and determine where you can cut costs. For example, your daily coffee from the coffee shop or the lottery tickets you purchase each week. When you are creating a budget it is important to cut any excessive spending if you truly want to get out of debt.
If necessary you can invest in computer software to help you develop a budget that will focus on paying your necessary expenses and developing a plan to begin paying off your debt.
Contact your Creditors
If you are ever experiencing difficulty making ends meet, it is important to contact your creditors. Let them know about your situation, in many cases they will be able to help you adjust your payments to an amount that you can handle. You should never wait until your accounts have gone to collections, instead be proactive and show initiative that you are trying to pay off your debt.
If you are behind, late or unable to make payments on your debts you will begin receiving collection calls and letters. This can be extremely stressful, to the point where many people avoid the phone altogether. You can request to have not further contact from these individuals, which has to be honored. This will have to be in writing, but will help to reduce the additional stress that your debts are causing.
The fact is that you do have options. You can take many steps to handle your debt situation. You can also contact Be Free Financial where you can receive additional options for handling your debt. Debt relief will not simply happen, you must be proactive and take the initiative to do something about it.
There is no doubt that nobody wants to go into debt, but unfortunately a lot of people are finding it very difficult to break free of the debt they have created. Additionally, with the state of the economy many people are experiencing excessive debt simply to handle day to day expenses. This fact alone makes it more difficult for many Americans to make ends meet and still pay off their obligations to the bank or lenders. Debt causes stress and due to the collection calls and letters that are continually making appearances. However, there is help. The following tips will help you discover some of the methods that may help you get out of debt and once again reign control over your finances.
Laying Down Your Credit Card
This is the first, and usually the most common way of getting rid of your debts. When you are in debt you should drastically reduce the number of times you buy things using your credit card. Instead, use your debit card because it will enable you to pay for what you can actually afford and at the same time helps you to spend within your budget; cutting down unnecessary spending.
Asset liquidation is another important option to apply in getting out of debt. Assets are any of your properties such as electronic gadgets, cars and real estate. They can be liquidated; sold and the resulting cash can be use to settle your debts or pay the obligation.
Making Extra Payments
Another good option for settling your debts is to make extra payments. If you have any extra money, do not waste time in channeling it into paying off your debts. This is important because paying just the minimum amount will not do you any good. In fact, this method will likely just prolong the debts causing more interest to accumulate, costing you even more in the long run.
Talking to Your Credit Card Companies
It is also advisable to talk to your credit card companies especially when you find out that you cannot settle what you owe on time. In situations like this, it would be in your best interest to talk to your creditors and explain your current situation. This could convince them to lower the interest rate or offer other debt relief options for you such as debt consolidation or debt settlement.
The fact is that you have many options available for debt relief. It is important to be proactive about the situation in order to find relief. There are no shortcuts; however there are solutions that you can seek if you are suffering from large amounts of unsecured debt. Keep in mind, no one will do this for you, you must be willing to help yourself when it comes to the debt you have accumulated. Once you have repaired your credit you can once again enjoy the ability to secure loans and emergency funds when necessary. Additionally, being out of debt will help you breathe easier and reduce the stress you experience due to financial issues.
If you have a negative item on your credit report, it is supposed to be wiped from your credit report after a certain amount of time, which is typically seven years. This rule holds true for virtually any type of delinquent or unpaid debt you may have. Bankruptcies are the only financial items that will stay around longer, usually up to 10 years. The fact is that there are many negative items that can hang around much longer than the allotted seven years. If this has happened to you, you may have to take a proactive stance. You will have to initiate the removal process. This is essential in order to restore your credit score.
Tips for Removing Old Debt
If you are trying to remove old items from your credit report, there is a process you will have to go through. Use the following tips to work through the process:
- Verify the accounts age: If you are 100 percent confident that your debt should be removed, but has not, you should ensure that the reported date is correct. If you have had judgments or bankruptcy related to the debt, then verifying the date of the debt will be quite easy. However, if there were sporadic payments made, this may be more difficult.
- Ensure that old delinquent accounts are not reported as new debts when they are sold to other collection agencies. This is a common problem. If this occurs, you should dispute the claim to have it corrected.
- Collaborate with all three credit reporting agencies. You need to obtain your free credit report from all three credit agencies: Equifax, Experian and Trans Union. They will not all have the same information. If a debt is on one, you should ensure that it is removed; this is your responsibility if it is older than seven years.
- Gather your evidence. If you do not have the proof of a judgment or bankruptcy, you will need to find old bills, and other documents to verify your claim. You can also send a letter to the credit bureau that has the old debt present.
- Write your letters. You will write a letter to the credit reporting agencies, as well as the creditor who is concerned. This will help you remove the debt more efficiently.
- Always follow up. If you receive no response, you should continue sending letters until the issue is resolved to your satisfaction, or the removal of the negative debt.
- Enlist help. If all of your attempts to remove the old debt fail, you should seek legal guidance. You do not necessarily have to file a lawsuit; however a letter from an attorney will typically grab someone’s attention.
It is important that you take action in cases of old debt remaining on your credit report. If it is not automatically removed, chances are it will remain, negatively impacting your score indefinitely. This is why it is so important to check your credit reports each year and go over the information carefully to ensure that you are not being impacted by something that should be removed.