CreditMizer wrote:
While I do consider payday loans to be awful (only 1 step above indentured servant) they are legal debts and can be collected.
While you may have paid more "interest" (which really isn't interest) than principle it is possible you never paid any of the principle and thus do owe them the full amount. You more than me know the payments are scheduled to never paydown principle. If you took a $300 advance and wrote check for $350, then when it was due paid $50 and "flipped" the advanced for two weeks the full $350 is still owed. Do this 10 times and would would have paid $350 in fees without touching any of the debt.
Claiming that you feel you don't owe anymore because the interest is more than the loan is not a valid defense.
The good news is that payday loans do not show up on or affect credit reports because they are NOT loans.
They don't show up until they are assigned to a CA to collect. Even without a CA, they do show up on ChexSystems, Teletrack, etc.
They are an advance with very very very high fees. They are structured in such a way to seem like loans but they are not loans.
The bad news is that despite not being loans they are legally collectible debt (just like unpaid tickets, canceled cellphone contracts, shut off utilities, or medical bills). If the payday loan company sells the loan to a collection company they can report the collection on your report.
Without any proof of payment your ability to dispute the loan as paid would be unlikely. Even if you did have proof of payment if you just paid the "advance fees" then likely you never touched the principle and the debt is valid.
What you do is up to you but if you think it is likely they will hand debt over to collections then arrange to pay and get it clearly in writing that the payment is in full and there are no other outstanding advances. If you continue to communicate with them PAY THE LOAN as many companies see a debt with recent communication as collectible and are more likely to attempt collection.
Message Edited by CreditMizer on 05-01-2008 02:53 PM
In my county, the prosecutor will return thier file to them when they turn it over to the PA as "bad check"
Their next option is sue in small claims, the judge usually throws them out IF you have paid more in fees/interest than you borrowed to begin with and especially if you do not have sufficeint income to pay.
Also, if the judge does side with them, he usually sets the amount owed equal to amount paid. NOTHING added for fees/interest. Sometimes court cost are added. Then he will set you up on payment and give you so long to pay before it is "ordered" as a judgment.
Some courts are more on the side of the consumer, some are not. Also read up on your AG's website about what they have to say.
Some AG's are really cracking down on them and capping fees/interest rates.
