How to get out of the payday loan / cash advance rut – quickly
The following is a clip from chapter 2 of the book Getting Control : The Complete guide to getting yourself out of horrible debt- by Troy Flora
NEVER ENDING PAYDAY LOAN TRAP CYCLE
I understand that recently the state and federal governments have been putting policies together that is becoming a fight for the cash advance companies to continue with business as usual with 300% interest and fees and the government looking for a fair middle ground to help protect the people. The following steps are in place from where I had done the process to get out. I show my old steps and will input information that is relevant to new policies. Keep in mind to check your local, state and government policy before you do the process as I did.
Most cash advance companies have a policy that if you cannot pay off your total balance all at once, they will not take a partial payment or any payment at all. I know it sounds funny. When I had 10 cash advances most of the companies I dealt with had a policy that they had to deposit your check. It had to be returned to them by your bank and after they received back the bad check, then they would then make a payment arrangement with you. I did work with a few of them that would just make payment arrangements with out depositing the known bad checks. If they will work with you with out cashing the bad check then great. If they don’t work with you before cashing the bad check follow the steps below.
Steps to take to get out of the cycle (if the loan company will not work with you on a payment plan)
Try to work out a deal with the cash advance to make out a payoff arrangement program, this is a new program that I know of that had been implemented since I created the following steps.
The cash advances cut up the entire total you owe by 4 equal payments. So if you get paid weekly it is four weekly payment installments to pay it off for good. If you get paid monthly then it will be 4 equal monthly payments. Most will not loan you another loan if you do this program, but that is cool too. Why would you want to after following the information in this book? If you got paid every two weeks, then it will be 4 equal payment installments paid every two weeks. So if you owed $300.00 it would be 4 payments of $75.00 until it is paid off.
1. Open up a new bank Account.
1.Wait until your Direct Deposit is going into the new bank account. It is even better if you have a new set of checks and bank statement from your new bank account.
1.Once you have your new bank account all in order and you know your paycheck won’t be affected by any complications from any transactions. NOW IT IS TIME TO GET OUT OF THE HORRIBLE DEBT.
1.Now that you have a new bank account open, old bank account closed and some time until your next cycle of rut is due, you Honestly tell all your cash advances the same brief explanation to them that you told the bank. You have run into some personal financial troubles and can’t pay them at this time. Some may extend your deal for another 2 weeks or other deals. Just stay by your guns and state that even at that time you can’t come up with the whole amount but you will work out a payment plan.