You borrowed an undisclosed amount of money from CashCall in 2006 and you never made a payment. A collection agent is now attempting to collect the loan. On an unrelated matter, you have a pending judgment on a Capital One account.
|CFPB Sues CashCall|
| In December 2013, the federal Consumer Financial Protection Bureau (CFPB) filed lawsuits against CashCall and its two subsidiaries Western Sky Financial and Delbert Services Corp. for unfair, deceptive, and abusive practices, including illegally debiting consumer checking accounts for loans that were void. |
See the Bills.com article Need to Repay Cash Call or Western Sky Loan? for details.
I see four issues in your message:
- State usury laws and CashCall loans
- CashCall loan collection
- Debt validation
- Judgment on Capital One debt
CashCall is an Anaheim, CA firm that provides unsecured, signature loans to consumers. Rates vary by consumer, but some offered are 139.34% APR. CashCall avoids state usury laws, which limit the maximum interest rate charged to a consumer, by partnering with a bank in a state with no usury rates. The bank makes the loan, and then a few days later CashCall buys the collection account from the bank and becomes the owner of the loan.
CashCall is one of several firms offering high-interest signature loans. Many state attorneys general recommend that consumers avoid high-interest loans. See the Texas Attorney General and California Attorney General's resources about loan rates applicable in Texas and California, respectively.
Collection of Unsecured Debt
Bills.com has numerous articles on the collections process available to creditors. Read Collection Advise, which explains wage garnishments, liens, and bank levies.
It is my understanding that you have received a notice from a collection agency for what the CashCall Loan. Consider requesting a debt validation to verify the loan. If the loan cannot be validated it cannot be collected.
Settling a Judgment
A creditor must obtain a judgment before it can collect a debt. This is a legal process that the creditor must complete. By law, the creditor must give the defendant adequate notice of the hearing, at which you have the option to appear. If you did not receive the notice of the summary or complaint, then read this article and comments on judgments and settlement to understand your options. Understanding debt negotiation and settlement and strategies will provide background information you need to resolve your accounts.
Bankruptcy and Credit Score
As a last resort, you may wish to consider bankruptcy. Your credit score will already have been affected by your other credit issues and the Capital One judgment. Your CashCall loan, like a payday loan may be considered in a bankruptcy filing if you qualify.
I suggest you do the debt validation on the CashCall loan and hopefully negotiate a reasonable settlement for that debt. Contact Capital One and negotiate a settlement before your bank account is levied or a wage garnishment is established. I advise contacting an attorney in your state who is experienced with debt and bankruptcy for further information on how to handle the judgment.
For the benefit of other readers who may be considering a CashCall or payday loan, the Federal Trade Commission suggests these alternatives to high-interest loans:
- Consider a small loan from your credit union or a small loan company. Some banks may offer short-term loans for small amounts at competitive rates. A local community-based organization may make small business loans to people. A cash advance on a credit card also may be possible, but it may have a higher interest rate than other sources of funds: find out the terms before you decide. In any case, shop first and compare all available offers.
- Shop for the credit offer with the lowest cost. Compare the APR and the finance charge, which includes loan fees, interest and other credit costs. You are looking for the lowest APR. Military personnel have special protections against super-high fees or rates, and all consumers in some states and the District of Columbia have some protections dealing with limits on rates. Even with these protections, payday loans can be expensive, particularly if you roll-over the loan and are responsible for paying additional fees. Other credit offers may come with lower rates and costs.
- Contact your creditors or loan servicer as quickly as possible if you are having trouble with your payments, and ask for more time. Many may be willing to work with consumers who they believe are acting in good faith. They may offer an extension on your bills; make sure to find out what the charges would be for that service — a late charge, an additional finance charge, or a higher interest rate.
- Contact your local consumer credit counseling service if you need help working out a debt repayment plan with creditors or developing a budget. Non-profit groups in every state offer credit guidance to consumers for no or low cost. You may want to check with your employer, credit union, or housing authority for no- or low-cost credit counseling programs, too.
- Make a realistic budget, including your monthly and daily expenditures, and plan, plan, plan. Try to avoid unnecessary purchases: the costs of small, every-day items like a cup of coffee add up. At the same time, try to build some savings: small deposits do help. A savings plan — however modest — can help you avoid borrowing for emergencies. Saving the fee on a $300 payday loan for six months, for example, can help you create a buffer against financial emergencies.
- Find out if you have — or if your bank will offer you — overdraft protection on your checking account. If you are using most or all the funds in your account regularly and you make a mistake in your account records, overdraft protection can help protect you from further credit problems. Find out the terms of the overdraft protection available to you — both what it costs and what it covers. Some banks offer "bounce protection," which may cover individual overdrafts from checks or electronic withdrawals, generally for a fee. It can be costly, and may not guarantee that the bank automatically will pay the overdraft.
I hope this information helps you Find. Learn & Save.