A lot of payday loan clients in the long run find themselves in a state where they aren’t able to pay back their obligations. It’s normal to wonder what consequences you will be facing if you do not pay back the payday loan.
Depending on what your loan documents stated and on what state or country you live in, there will still be rough consequences. Basically for this reason, first, we suggest that you carry out anything you can to get the payday loan paid back on time. Your second option would be to contact the lender and explain why you can’t pay on time if you completely have no other way to pay the amount on the due date they have scheduled. You will see that some payday lenders will work with you, if you are willing to work with them. But if you ignore it then it will only make the situation worse.
Some customers are being threatened by unethical lenders that they will be sent to prison if they do not pay them which is simply not true, and by saying it is, they have violated the law. They can’t have you arrested just because you haven’t paid the payday loan on time. You should immediately report them to your State Attorney General if you encounter cases like this.
They can continue with your loan balance being resubmitted to your bank for payment every day until it clears while they can’t have you arrested. If you do not have enough funds in the account to have the loan covered then you will get hit with overdraft charges. Having day by day overdraft charges can add up quickly.
You might be apt to close the account once your account has quite a lot of overdraft charges. Closing your checking account will stop the overdraft charges but it will not make the problem go away. First of all, you owe your bank money now. If you do not pay back the bank, they’ll report you to the ChexSystems, which will make it harder for you to open a checking account in the future.
The payday lender can now accuse you and apply for a petition in civil court for reimbursement of the amount of money that you incurred to them for making a potential problem with your bank. If the payday lender does this, they can be granted attorney’s fees by the court and instead of owing them a few hundred dollars, you may end up owing them a few thousand. The lender can garnish your wages and place liens on your assets once they have come up with a final decision against you.
The main thing is that you will not be able to get away from this debt. Failure to pay on your cash advance loan might end you up creating a bigger problem. The most excellent way to avoid problems on a personal loan is not to get a loan in the first place. Rather than just a couple of weeks, there are direct lenders who make loans that last up to three months if this isn’t an option. You will be paying more interest for the longer-term loan, but it can also give you more time to earn the money you need to pay for the loan. Working hard can improve your financial position a lot in just three months and you can escape from the debt trap.