Many people have found out the hard way that payday lenders are expensive. They have high interest rates and very difficult predatory terms regarding repayment. If you find yourself in a situation where you are being sued by the payday lender there are some things that you can learn to help yourself. It can help to get out of the payday loan or learn how to prevent you from being sued.
It is important to note than most payday lenders will aggressively pursue lawsuits if a borrower goes into default. Many individuals do not realize that you will not only be responsible for the amount defaulted on however the payday lenders can also sue for legal and interest fees accrued.
Many states allow judgments as an answer to the lawsuit; this does not stop the interest rates from increasing until the amount is paid off. Other states allow you to charge the borrower any legal fees that the payday lenders received. This will add legal fees and interest on top of the principal already owned.
One of the most important things that you as an individual can do to avoid a lawsuit is to prevent defaulting on a loan. This sounds like a no brainer, however it can sometimes be something that we didn’t expect to happen. It is important to remember that if you get into one of these situations with payday lenders that you come at it head on and not run. Running can only make the situation worst under the best circumstances.
In Good Standing
If you are in good standing with your payday lender, this is wonderful. However, you might be concerned that you are on the edge of losing control. There are some things that you can do to help you gain that control again.
- Budget – A budget is one of the most important things that you can look at whenever you feel like your financial situation is become uncontrollable. Note where all your expenses are going, what bills you are paying, what groceries you buy, where your entertainment money is spent. Then, determine if anything can be trimmed. Sometimes just getting rid of that Starbucks coffee is enough to make a difference, because any little bit helps.
- Prioritize – It can seem obvious, however with a payday lender you need to place it higher than any other debt. This can help to ensure that you will pay it off quickly. After all your basics are met, if there is any extra money use that to add an extra payment to your loan. By focusing on this debt first, your payday lender will be removed first and then you can move on to other debts.
- Extra Money – One thing that many people forget about is earning a little extra money. There are so many opportunities these days with being able to make an income online that you could freelance a little to make some extra money on the side. This is important because all of the extra funds can be placed on your loan, helping you to pay it off just a little bit faster.
- Keep in Touch – It is very helpful to many people to keep in contact with their payday lenders. This is not a situation where if you continue to contact them they may not sue you. However, they may be more willing to work with you on specific terms to help you pay it back properly. You may also be showing them a commitment that they needed to see in order to help you with your case.
Already in Default
If you are already in default with your payday lenders then there is a chance you can salvage the situation. This will require you to be meticulous and considerate to the current situation and not just ignore what is going on around you regarding the payday lenders.
- Contact – It does not matter what standing you are in having contact with your payday lender is critical to the situation. Reach out to your lenders; let them know that you are trying to pull yourself out of default. You may not be able to stop yourself from being sued, however if it has not begun you may postpone it a little bit.
- Payment – Once you have reached the point of default, you need to make sure that you do not miss a single payment. Set up a new payment plan with your payday lender. Then stick by it, show regular payments this can work in your favor in a court if it goes that far.
- Pro Bono – If you are being sued, seek pro bono legal counsel to help you. Search the internet, or cause the local bar association and ask for a list of the individuals offering services.