Welcome to our payday loan consolidation guide.
The following information is our three step process to eliminating payday loans from your life. Simply follow these steps and watch as your payday loans vanish. Make sure to follow these steps closely as it is very important you complete all of these steps in order. If you have any questions or concerns please feel free to contact us.
Step one – Deny access to your account!
If there is no account there is no money to take!
This is probably one of the most important steps in the entire process. As long as the payday loan agencies have access to your bank account they will continue to take the money from your account. This is a fact and unfortunately putting stop payments on your account will not stop these organizations from taking money. Often time’s organizations will split up your payment into smaller multiple payments totaling the overall amount that you are required to pay back. Sounds illegal doesn’t it? Unfortunately it’s not.
When you put a stop payment on a check or per-authorized payment you are often required to give the check number, exact amount, and exact date. This little trick of multiple smaller payments actually prevents you from putting stop payments on your account; essentially giving them full access to your money.
In order for you to stop this out right you need to open a new account and close your original account down. You don’t need to change banks, just accounts. Now most people have a lot of per-authorized payments coming out of their accounts making this a royal pain but it’s not as difficult as one would think. In most cases your financial institution can redirect those per-authorized payments (i.e. car insurance, car payments) to your new account.
Remember, no access no money!
Step two – Inform the organizations in writing!
Never discuss the matter on the phone!
One of the most common mistakes people make when it comes to dealing with payday loans organizations is, they never get anything in writing!!! This is by far one of the worst things you can do. In the event anything ever has to be dealt with in court there is no written proof of your dealings. Always resolve these matters in writing!
What you want to do is write each organization a letter stating that it is your intent to repay the debt by means of a monthly payment and that you are cancelling all per-authorized payments and checks to the organization (if any are currently issued). Always give your account number (this is usually your name or a reference number) and the amount of time that you are going to take to pay the debt back (don’t exceed 8 months). Also you will want to specify the amount you are going to pay them each month. Make sure that you write in there that you are paying this back at 0% interest. No doubt this will anger them but be strong…. you will win this fight.
Very Important, You want to make sure you include a “cancellation of voluntary wage assignment” with every letter sent out. Now don’t get scared by this. It’s actually a very simple letter that you send to them and of course a fill in the blank version is available below.
Hint: In your letter of repayment make sure you state that no payments will be made until you receive written confirmation of their acceptance which is to be signed by an authorized signatory. Also, make sure that you state in your letter that a verbal acceptance is not sufficient. They must send you a written letter stating they accept your payment terms.
Next step in the portion is sending the letter…
This is where the next common mistake is made. Most people will presume that regular snail mail is sufficient enough to handle this. It’s not. Always send these letters registered mail and always require that someone sign for it on the other end. Make sure you keep a copy of the signature for your records. Canada Post can provide you an online record of this which can be downloaded so make sure you save it to your computer or print it out. Once the payday loans company receives this letter they will no doubt start making phone calls to you demanding payment or else! This is a scare tactic and in most cases there is no bite to their bark. Stand your ground; insist they sign the proposed payment plan. Remember, always get it in writing.
Note: A sample letter is attached at the end of this document.
Step three – Sending payment!
Send post dated checks!
Once you have received written acceptance on your offer always send them post dated checks for the amounts specified in your repayment term. This step will ensure that you do not miss a payment to them. It is very important that you do not miss a payment to these organizations once they have accepted the program. One missed payment and the entire repayment program is out the window giving them full right to send you to collections and or take you to court.
What do you do if they decline?
If they decline repeat all steps that you have taken. This will show that you have made an attempt to repay the debt. If they decline again it is up to you to do what you want. You can pay the debt out in one lump sum or you can simply go ahead and make the monthly payments anyways.
The one thing that payday loan companies will threaten to do is to take you to court. The reality of this is it will generally take them 5-6 months to get a court date. As long as you consistently make an effort to get a repayment proposal in place the courts will look favorably on you. payday loan companies do not want to have to take you to court as it isn’t beneficial to them. Its time, money, and to be frank, not worth it. Keep forcing your hand with the monthly repayment. Eventually they will accept.
Hint: If a payday loan company declines your offer on several occasions send them the checks anyways and keep records of that. Make the payment! As long as you are making an effort to repay the debt you will be safe in court (if it comes to that).
Please make sure you read all steps before commencing!
1) Close your current account and open a new account. Always do this before heading to the second step. Make sure that your new account is up and functioning before sending your letters.
2) Write your letter of repayment. Always be sure to include your account number, the name and address of the institution, the payment amount you are able to pay (budget may be required), the interest rate that you are willing to pay (always start with 0%), and the time frame in which you are going to pay the debt back (no more than 8 months).
3) Write your cancellation of wage assignment and include it with the repayment letter. Make sure that you do this for every organization and also be sure to give a copy of the voluntary wage cancellation to your employer (You must do this step).
4) Send all documents registered mail and require a signature from someone on the other side. This will prevent anyone from their organization from saying that they didn’t receive the paper work.
5) Never discuss information over the phone. Always get everything in writing with an authorized signature. Never accept anything verbally.
6) In the event they decline the first attempt try again. Never just leave it at one attempt.
7) If they decline your offer after multiple attempts send the money anyways. Always make the payments you said you would. Send them the post dated checks and allow them to cash the payment but never give them more that what you specified in your repayment letter.
8) Keep copies of all correspondence. Never get rid of the documents. You need to keep them for 6 years. After that they can be thrown out.
9) Once all payments are completed request a letter stating that the debt is paid in full and that there is no balance remaining.
Sample Letter Below
Att: (companies name here)
Re: (your account number or your name goes here)
To whom it may concern:
My name is (enter your name here) and my account reference with you is (enter reference number if different from your name otherwise just state your reference number is your name). I have recently taken a loan from your organization with the intent to pay it back on my next pay period. Due to financial difficulties I will no longer be able to fulfill my obligations to you under the current repayment criteria. The amount I am indebted to you is (enter dollar amount here)
It is my intention to repay this debt on a monthly term and the monthly repayment amount has been determined on my monthly financial budget. It is my intention to pay (enter dollar amount here) per month over (enter number of months here). I am asking this debt to be paid out at an interest rate of zero percent. At this time I am also advising you, (enter the companies name here), that no further correspondence will be permitted over the phone and all correspondence from this day forth is to be in writing. This is to ensure that proper documentation can be presented in a court of law or payment hearing. I am also hereby cancelling any wage assignment that I may have signed and no longer give you permission to contact my employer or any other individual regarding this matter. Any attempts to do so will be deemed as harassment and will be dealt with accordingly.
Please note that I will not be sending payments to your organization until you have accepted this repayment term. Acceptance will require written confirmation by an authorized signatory from your organization to approve the repayment term.
If you have any questions or concerns please feel free to contact me in writing. Once this repayment proposal is accepted I will send post dated cheques within 10 business days.
_____Your signature here__________________
(your name here)
(your reference number here)