how to get out of the pay day loan rut
troy flora
Posted by troy flora
on Nov 19, 2011
here is the best way to get out of this cycle of loan payday loan
taken from the book Getting Control the complete guide to getting yourself out of horrible debt by troy flora - amazon.com
If you owe money to a payday loan cash advance place, then you already know that it’s a never-ending cycle, of borrowing cash until payday then you come in and pay back the loan with a huge interest. The problem is by this time; you have even less money than you had before you started. So, you borrow again…and again…and again. Your fear of them garnishing your wages over takes you; the fear of writing a bad check that will result in criminal procedure keeps you doing it. What few people realize is if you just don’t pay them, it turns in to a collection matter just like a credit card, only better because it is not on the credit bureau. There is a catch; you still have to pay them, just in a different way. Keep paying the advances like you were before, but instead of it being redone, it would drizzle down.
Where are you at financially?
Let me take a guess, you get your paycheck and go to your cash advance or cash advances to repay them for the payday loan or loans that you previously had gotten.
How are you feeling?
The feeling of self-hate, frustration, anxiety, sadness, fear and many other quick changing emotions race through your mind. I know the feeling; I’ve been there before. Let me tell you about how I came up with this solution to the end of all debts. I say that from a lot of experience with the payday loan situation. At one point I had a family emergency where my wife was in another country and gotten robbed. She had missed her plane flight back and I had to come up with money to get her back home. I had bad credit and couldn’t get a loan to get the money. I needed about $1,000.00 for the trip and food expenses. So in order to get enough money I had to take out 3 payday loans. Well, after that, my cycle began. I paid the loans, but had to get another one to pay the rent. My paycheck was already smaller than the rent payment. So it slowly grew up and up. Three years later… I last had 10 out at one time. I’m not sure but I think that it is a record. It was draining most of my income from my 1st job. I had to work constantly just to almost make it. Whenever I had a little extra money I would pay off 1 or 2 but later there would be something that would come up and I would have to find money, and the cycle would start again even bigger than before.
What did I do?
I am very resourceful and had found the answer after much research and testimonies from others about money problems that I focused a system that would help out this is not like with a convenient consolidation loan. But a complete debt elimination plan. The main focus was on payday loan cash advances.
NEVER ENDING PAYDAY LOAN TRAP CYCLE
I understand that recently the state and federal governments have been putting policies together that is becoming a fight for the cash advance companies to continue with business as usual with 300% interest and fees and the government looking for a fair middle ground to help protect the people. The following steps are in place from where I had done the process to get out. I show my old steps and will input information that is relevant to new policies. Keep in mind to check your local, state and government policy before you do the process as I did.
Most cash advance companies have a policy that if you cannot pay off your total balance all at once, they will not take a partial payment or any payment at all. I know it sounds funny. When I had 10 cash advances most of the companies I dealt with had a policy that they had to deposit your check. It had to be returned to them by your bank and after they received back the bad check, then they would then make a payment arrangement with you. I did work with a few of them that would just make payment arrangements with out depositing the known bad checks. If they will work with you with out cashing the bad check then great. If they don’t work with you before cashing the bad check follow the steps below.
Steps to take to get out of the cycle (if the loan company will not work with you on a payment plan)
Try to work out a deal with the cash advance to make out a payoff arrangement program, this is a new program that I know of that had been implemented since I created the following steps.
The cash advances cut up the entire total you owe by 4 equal payments. So if you get paid weekly it is four weekly payment installments to pay it off for good. If you get paid monthly then it will be 4 equal monthly payments. Most will not loan you another loan if you do this program, but that is cool too. Why would you want to after following the information in this book? If you got paid every two weeks, then it will be 4 equal payment installments paid every two weeks. So if you owed $300.00 it would be 4 payments of $75.00 until it is paid off.
The following is the way I set the plan up using the old way. If any part of it applies to your situation then use it. Some modification maybe made to your individual situation.
1. Open up a new bank Account.
This can either be with your current bank or another bank you trust. I recommend that you find one that is free checking. I used a bank called SunTrust. They had at the time, a plan for every new account you opened, you would get a $50.00 visa gift card and I used the money /gift card to my advantage. The last time I checked they still have that program. Many banks have similar programs. I know bank of America also has a cash deposit bonus for new accounts from time to time.
2. Wait until your Direct Deposit is going into the new bank account. It is even better if you have a new set of checks and bank statement from your new bank account.
You continue business as usual with your loan cycle. If you can lessen it at all then do so. Setting this up simply eliminates any future problems with your current or old bank account from causing problems with your direct deposit messing up your paychecks. The last thing you want is bounced checks messing up your income on top of the cash advance problem itself. This process lessens the fees from your bank. That is all.
3. Once you have your new bank account all in order and you know your paycheck won’t be affected by any complications from any transactions. NOW IT IS TIME TO GET OUT OF THE HORRIBLE DEBT.
4. You first go to your bank with the old bank account and tell them the truth (mostly) you tell them as little as possible. I simply stated to my bank that I had ran into some personal financial troubles and was going to have many bad checks come in and wanted to lessen the damage. If I put a stop check on all of the checks. The bank charges like 35 dollars per check. I had about 8-9 bad checks coming at once. I stated that I wanted to close the old bank account. (Keep in mind your banks policy on time frame from pending transactions SunTrust is 3 days. So don’t wait until your due day to do this, give your self at least a week for transactions, just to be safe).
5. Now that you have a new bank account open, old bank account closed and some time until your next cycle of rut is due, you Honestly tell all your cash advances the same brief explanation to them that you told the bank. You have run into some personal financial troubles and can’t pay them at this time. Some may extend your deal for another 2 weeks or other deals. Just stay by your guns and state that even at that time you can’t come up with the whole amount but you will work out a payment plan.
Note: Many Cash Advance loan places have a policy that they had to have the check sent to your bank and returned before they will work a payment plan with you. That is o.k. If you tell them up front that there are no funds in the bank to cover it. Then it doesn’t look like you did it on purpose. You need to make it look as if you did not do it on purpose. That is illegal, and you don’t need to add some type of check fraud to your problems. The cash advances deal with hundreds of people a day who don’t pay them on time, or at all. They are a business but dealing with people and money problems they are also not stupid, they know that problems come up. If you work a deal to pay them, and are talking with them and not hiding from them then they will work with you. If you are not answering their phone calls, then what are they to think? Then you just ripped them off. But if you talk with them and give them some money to pay off your debt, which they may even have sent to a third party collection agency, then you will be in a great position. Key is to use the golden rule. Treat the debt like you would want to be treated if you were in their shoes.
Some of the tellers at your favorite cash advance go into detail about details on why you can’t live up to your earlier responsibility. If they kept on with persistence I would make up some believable story like my wife got laid off and that loss of income is why I can’t come back to pay it in full at this time. Or my wife left my kids and me. Or my wife went to jail. Or a death in the family and she has to go to take care of it and it is out of state.
6. Finally Payday is here and your paycheck is on its way to being yours again.
In my case most of my cash advances were maxed out. That means I borrowed $500 and had to pay back $575. Every two weeks, that means I was paying $75 to 1 of them every two weeks. I had 10. I was paying $150 a month to 1 of 10. I keep stating this for a reason. This is the best part of the plan.
With that same cash advance, I told them I could not pay all of it at this time. But I wanted to make good on my debt with them and showed them that I was not just talk. I paid them $50.00, every two weeks. I did the same deal with most of them. They will tell you many times that the $100.00 is not enough. But if you give it to them they will take it. Because as long as you show that you did not deliberately write the bad check and you are making payment arrangements with them they cannot take you to court for this. Many of them understand your temporary hardship and will work with you to get your future business. After 90 days of course. But what do you care? You are never going to get into this rut again.
So in my case most of the payday loan places didn’t even charge me that return fee that they put into the contract. And none of them charged me interest. My loan was $575.00. I paid $575.00 and with the initial $50.00 on the 1st installment I was already down to owing them just $525.00 and in 2 weeks I’m back with another $50.00 payment. Now my balance it $475.00 and so on. It didn’t take long to pay off all my cash advances. Some I owed less and when I paid off one, I applied that payment money to one of the other ones and when most of them were down to $200.00 or less I would just stop payments to the rest of them and focus all payments to entirely pay off 2-3 at a time and with in about 3-4 months I eliminated my $5,000.00 rotating nightmare. In a retrospect I could have paid my car off with cash from all the money I gave the cash advance in just 1 year.
Once you pay them off many will tempt you to come back. Keep your self from doing it.
It sounds like you're in a bind. Which company did you get your payday loan from? I need to get one for some unexpected costs as a result of a minor fender bender.
