BILL'S ANSWER
If you default on your payday loans, the lender can take the same action as any other unsecured creditor to enforce a defaulted debt. Generally, their collection efforts will start with telephone calls and dunning letters demanding that you pay the balance of the loan. If the payday loan company refers your accounts to a collection agency, you can usually stop the telephone calls by sending a cease communication demand letter, commonly called a cease and desist notice, to the collection agency. A federal law called the Fair Debt Collections Practices Act (FDCPA) states that third party collectors must stop calling you if you notify them in writing to do so. Several states, such as California and Texas, extend many of the regulations in the FDCPA to cover original creditors as well. To find out more about debt collection laws in your state, visit the Privacy Rights Clearinghouse.
If the creditor or collection agency cannot coerce you to pay through standard collection tactics, such as threatening phone calls, the creditor may decide to file a lawsuit against you to obtain a judgment against you for the balance of the debt. If the lender sues and obtains a judgment against you, it can then take steps to enforce the judgment as allowed by your state law. The most common methods of enforcing a judgment are wage garnishment, bank account levies, and property liens.
Bills.com also offers more information on the Payday Loan Information page, and has answered reader questions about payday loans in California, Florida, Illinois, Massachusetts, Missouri, Texas, and Virginia.
If you do not repay a payday loan, the payday loan company has several legal remedies, including wage garnishment, levy, and lien. See the Bills.com resource Collections Advice to learn more about the rights of creditors and debtors.
I can also point you to the Free Bills.com Financial Planning and Budget Guide, which can help you manage your finances and learn about budgeting and prudent financial management.
I hope this information helps you Find. Learn. Save.
Best,
Bill
www.bills.com/
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