Payday loans

[Granny]

Hubby had a co-worker over today who asked me what happens when one can't repay their payday loans? Of course, I don't have a clue, My thoughts were that eventually it could be turned over to the D.A. as a hot check. Can someone fill me in please.

Thanks

[Kam]

Payday loans are not hot checks. Reason?

The payday loan place accepted your check knowing you could not honor it until the date on the check. Payday loans can be discharged in bankruptcy as well. Payday loan places will try to act tough and threaten lawsuits, etc. but they do not have a leg to stand on.

[Granny]

So the best they (the payday loan cos.) can hope for is a lawsuit and judgment? LOL, That's doesn't get them very far in Texas.

I don't think this fellow is looking to file bk, he just wanted to know what's the worst that would happen if he didn't repay as promised. Apparently, the payday places have attempted to send the checks through enough times to cause a significant overdraft of the bank account. From what I gathered, he has 4 loans at 4 different places.

I think he was unemployed/underemployed for a stretch and got himself into trouble. He is once again making decent money and could attempt to pay these off, provided they will work with him. Any suggestions on how he should handle these, other than bk.

[follie]

As long as they have access to his account, they are going to keep trying.

I had to close my checking account with a balance of -1100 because of payday loans. My own stupid fault.

So he can close his account, pay the bank directly if it's a negative balance, and open a new account elsewhere. Then, he can do what we do for other unsecured debts. But warn him to put everything in writing. These kinds of creditors have a way of not honoring agreements.

You should read the horror stories out there.

[Granny]

His bank account has a higher balance than yours did, will they let you close an account with a large negative balance?

[follie]

As long as he pays it. Or he can wait for them to close it for him (which I wouldn't rec.).

[Granny]

I think that's gonna be his only option, I think he said the balance is -1700.00 so far. I don't know why they haven't closed it yet. Personally, I'd march myself down there and ask them to close it and convert the balance to a note with very little if any interest.

[wayne-o]

I doubt if they will convert it to a note, but they might. But he should definetly close to stop the outrageous overdraft fees.