Dealing with Payday Loan Companies

SimIsOnTheUp

Pipsy -

Can I just check something?

Re Wonga -

I take it you gave them your Bank details, when you took out the loan online yes?

If so, cancel any Direct Debits / write to your Bank advising them not to give any authority to Wonga for any card transactions.

Better still, I would tell your bank that you have lost your debit card, and ask for a new card.

That way, Wonga can not debit your card / account as they feel like it, putting you back in the driving seat.

Good Luck,

Sim

SimIsOnTheUp

Pipsyoneone wrote: »

they also sent an email to me that was addressed to someone else which i am sure is a breach of data protection??

I'd forget this for now.

You've enough on your plate.

Just tell CCCS about it when you've got some help with your debts first.

saltnvinegar

Hi All

Just thought I'd bump this as it is getting towards the end of the month and approaching the Payday Loan 'open season' when a lot of people in these situations get their LBM.

Again I'll repeat the mantra throughout the entire thread - this advice is given for those who are having to make that choice between defaulting on a payday loan (and others) or paying the essentials (mortgage/rent, food, utility bills etc). This is not intended as a method of debt avoidance. If you do this to avoid paying your debts it will not help you. It will only prolong things and make things worse.

As always, if you're in this situation take impartial, free advice from someone like the CCCS to help you get back on your feet

Best

SnV

meatball101

Hello everyone.

I'm not sure if im posting this in the correct place or not as i am new to this (or any) forum. I am looking for a bit of advice on my current debt problems. I was directed here by a Google search. If i am in the wrong place please accept my apologies and be kind enough to point me in the right direction.

I will start by explaining my situation. I currently have 3 payday loans with different companies that i have not defaulted on but will not have the money to pay this month. I am also 2 months behind with payments to a debt collection agency that contacted me when i fell behind on payments to Welcome Finance. They are as follows, Wageday Advance £600 and PoundsTillPayday £570 due on 08/11/10, Wonga £510 due on 11/11/10 and Lewis Group Debt Collection £1760.

The payday loans have been ongoing for around 18 months now and in order to keep my head above water i have been extending and reloaning every month. I have found myself in the same trap as lots of others i have come across on this site.It is costing me more and more each month. In April this year i found myself unable to keep up with my rent and had no choice but to move into my brothers place. I am still there and so far haven't been able to give him any money for rent, bills etc as all of my cash goes towards interest fees. The problem i have is that when i get paid next month on the 8th i won't have enough to pay even the minimum amount. I have extended my Wonga loan as many times as they will allow so they will want the full £500. Pounds till payday do not offer a rollover, only the option to pay back in full and then reloan. Wageday advance will allow me to pay only the interest of £120 and extend for another month (I have been doing this with them for around 10 months now). My take home wage is between £900-£1050 depending on how much overtime is available. My travel costs are just under £200 per month so paying back even the minimum loan amounts (Ignoring Lewis group) and travel costs will cost almost £1500.I knew that i would eventually reach this point but was hoping that a solution would arise before it did. I have closed down my bank account and arranged for my wages to be paid into another account. I know this won't solve the problem, It will only end up costing me a lot more in the long run. It also means that the payday loan companies will start to call my employers as i had to provide my work number when i first applied.

I have applied for several debt management plans online. The only one that has gotten back to me yet are Debt Line who have told me that for around 25 monthly payments of £160 (£4000) they will deal with all my debt and i won't have to worry about anything except one payment of £160 per month. This sounds like a dream come true. It would mean no more sleepless nights, i won't have to worry about my employers being hastled, finally being able to pay back my family for supporting me for most of the year and getting back on my feet in time for 2011. The only problem i have with this is that Debt Line won't be able to tell me exactly how many payments i have to make until i have signed up with them, Made my first payment and allowed them to contact the companies i owe in order to try and freeze the interest. I know they take a fee every month and that there companies out there that don't but none of the free ones have gotten back to me yet. I don't mind paying the admin fees every month and even paying a few more payments than they have stated if it means putting an end to my cash problems as of pay day in a couple of weeks.I just don't want to find myself stuck paying them for years and years. Has anyone else had any experience with them? Is it likely that i will be stuck paying £160 per month for far longer than they have stated?

I'm sorry for going on and on. I know it may seem like i'm the most depressing guy on earth and i only have myself to blame. I'm just looking for some advice from someone who has used Debtline in the past or are currently using them. Hopefully one day soon i'll be the person giving the advice.

Thanks in advance for any help you can give me.

saltnvinegar

meatball101 wrote: »

Hello everyone.

I'm not sure if im posting this in the correct place or not as i am new to this (or any) forum. I am looking for a bit of advice on my current debt problems. I was directed here by a Google search. If i am in the wrong place please accept my apologies and be kind enough to point me in the right direction.

Hi Meatball

Welcome to MSE! :wave:

You're definately in the right place so don't worry! The only thing I would recommend when you get a chance is to start your own thread as its more likely to be answered then adding to an existing one.

meatball101 wrote: »

I will start by explaining my situation. I currently have 3 payday loans with different companies that i have not defaulted on but will not have the money to pay this month. I am also 2 months behind with payments to a debt collection agency that contacted me when i fell behind on payments to Welcome Finance. They are as follows, Wageday Advance £600 and PoundsTillPayday £570 due on 08/11/10, Wonga £510 due on 11/11/10 and Lewis Group Debt Collection £1760.

OK. So your total debts amount to £3440? Can you confirm this is the only debt you have and there is nothing else outstanding to add to this?

meatball101 wrote: »

The payday loans have been ongoing for around 18 months now and in order to keep my head above water i have been extending and reloaning every month. I have found myself in the same trap as lots of others i have come across on this site.It is costing me more and more each month. In April this year i found myself unable to keep up with my rent and had no choice but to move into my brothers place. I am still there and so far haven't been able to give him any money for rent, bills etc as all of my cash goes towards interest fees. The problem i have is that when i get paid next month on the 8th i won't have enough to pay even the minimum amount. I have extended my Wonga loan as many times as they will allow so they will want the full £500. Pounds till payday do not offer a rollover, only the option to pay back in full and then reloan. Wageday advance will allow me to pay only the interest of £120 and extend for another month (I have been doing this with them for around 10 months now). My take home wage is between £900-£1050 depending on how much overtime is available. My travel costs are just under £200 per month so paying back even the minimum loan amounts (Ignoring Lewis group) and travel costs will cost almost £1500.I knew that i would eventually reach this point but was hoping that a solution would arise before it did.

Ok. So the most important thing to do here is to stop the debt spiral. More on how you can do this in a bit.

meatball101 wrote: »

I have closed down my bank account and arranged for my wages to be paid into another account. I know this won't solve the problem, It will only end up costing me a lot more in the long run.

You've done the right thing in setting up another bank account.

Can I check a few things:

1) Do the payday loan companies have the details of this new bank account or a debit card associated with it?

2) Is this new bank account linked to any other companies you may have debts with (e.g. Alliance and Leicester are the same group as Santander)

You're right in that setting up a new bank account won't solve the problem but what it will do is help you break the cycle of debt which is what you need to do.

And yes you may pay slightly more in the longer term but right now you need to pay what you can afford. You may find that the companies you are dealing with will freeze interest and charges anyway if you can prove you are in financial hardship.

meatball101 wrote: »

It also means that the payday loan companies will start to call my employers as i had to provide my work number when i first applied

Not necessarily. Mine never called my employers. Even if they do there are actions you can take to stop this, which if they ignore, the fines and compensation would be way more than what you owe them so they are not going to take that risk.

meatball101 wrote: »

I have applied for several debt management plans online. The only one that has gotten back to me yet are Debt Line who have told me that for around 25 monthly payments of £160 (£4000) they will deal with all my debt and i won't have to worry about anything except one payment of £160 per month.

Ok stop there. Which 'Debt Line' is this? There are several companies that all operate under a similar name. Do you have to pay them a fee? Paying £4000 to pay back debts of £3440 would suggest they are charging a fee.

Do not touch any company that charges a fee with a barge pole.

They are not going to make your situation better and are taking advantage of you when you are in a vulnerable position. Have a read of this thread first:

Where to seek professional impartial advice about your debts

meatball101 wrote: »

This sounds like a dream come true. It would mean no more sleepless nights, i won't have to worry about my employers being hastled, finally being able to pay back my family for supporting me for most of the year and getting back on my feet in time for 2011. The only problem i have with this is that Debt Line won't be able to tell me exactly how many payments i have to make until i have signed up with them, Made my first payment and allowed them to contact the companies i owe in order to try and freeze the interest. I know they take a fee every month and that there companies out there that don't but none of the free ones have gotten back to me yet. I don't mind paying the admin fees every month and even paying a few more payments than they have stated if it means putting an end to my cash problems as of pay day in a couple of weeks.I just don't want to find myself stuck paying them for years and years. Has anyone else had any experience with them? Is it likely that i will be stuck paying £160 per month for far longer than they have stated?

I guess this answers my question above. Have 'debtline' told you how much you are going to pay in fees yet?

Have 'debtline' confirmed if they will start paying your creditors immediately or if they will retain the first few months payments as their fee before they start paying your creditors?

I am assuming then that 'debtline' have recommended you go on a debt management plan? If this is the case did 'debtline' tell you the following:

Did 'debtline' explain that going on a DMP is not a guarantee that creditors will freeze interest (they are under no legal obligation to do so and some don't)

Did 'debtline' explain that even on a DMP creditors are still entitled to carry out collection activities (though most don't)

Did 'debtline' explain that creditors do not have to accept a DMP?

Did 'debtline' explain that creditors may still apply to the court for a CCJ even when on a DMP?

Did 'debtline' go through a thorough I/E sheet and come up with a realistic budget

Did 'debtline' explain that while on the DMP you should not apply or take out further credit?

Did 'debtline' explain that creditors will almost certainly default you in respect to your loans and that your credit file would be trashed for 6 years.

Did 'debtline' explain that if creditors do the above then they may still apply for a CCJ after, for example, 5 years of the default meaning your credit file could be trashed for up to 11 years?

Not trying to frighten him you here, but you should have been made aware of the risks of DMP's (and I am doing a self administered DMP so have personal experience!)

Being on a Debt Management Plan is not a 'dream come true' but is an effective way of dealing with your debts if done correctly. From the information you've given so far though I'm not sure that its the correct option for you.

I would recommend you post your Statement of Affairs on the MSE forum first. You can find a good SOA calculator here:

http://www.makesenseofcards.com/soacalc.html

You can publish the results of this straight to the forum without having to copy and paste. The DFW's on here will be able to advise you then based on your income and outgoings.

I would suggest that if you are living with your brother expense free (depending on how long his good will lasts!) and are taking home approx £900-£1000 a month you could clear your debts of £3440 in approx 6 months if you're prepared to be frugal.

You will then be debt free and start paying back your family in much less time than if you are on a DMP.

Best

SnV

jazzrose343

Hi I don't know if this is the right place to post but

I have got my self into some debt problems and require any assitance that can be given.
I have found myself with too much going out and unable to manage month to month.
This is mainly due to PAYDAY LOANS
I would prefer not to enter into a DMP and instead contact my creditors individually . Any help with template letters or generall advice would be very gratefully recieved.

What is the likelyhood of these companies accepting the payments.

Any help gratefully received

I live in a household that shares bills etc and my amounts on my statement is the contribution i am required to make at this time.

The monthly payment showing owing to PAYDAY LOAN COMPANIES is the amount they are expecting to collect on my payday if I do not rollover.

I am sorry if this has caused any confusion.


This is my statement of affairs




Monthly Income Details[/b]
Monthly income after tax................ 1075
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1075
Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 286
Management charge (leasehold property).. 0
Council tax............................. 100
Electricity............................. 15
Gas..................................... 15
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 0
Mobile phone............................ 35
TV Licence.............................. 0
Satellite/Cable TV...................... 30
Internet Services....................... 0
Groceries etc. ......................... 75
Clothing................................ 80
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 100
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 25
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 30
Haircuts................................ 0
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
(Unnamed monthly expense)............... 100
Total monthly expenses.................. 891

Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0
Total Assets............................ 0

No Secured nor Hire Purchase Debts
Unsecured Debts
Description....................Debt......Monthly...APR
Halifax Mastercard.............500.......15........18
Natwest MasterCard ............500.......15........18
Capital One Visa...............200.......10........30.04
Allied International...........700.......100.......0
Wage Day Advance ..............275.......275.......1737
Quick Quid.....................750.......750.......2689
PTPD...........................467.......467.......1737
PDUK...........................525.......525.......1737
Minicredit.....................509.......509.......2689
Wonga..........................529.......529.......2689
Total unsecured debts..........4955......3195......-

Monthly Budget Summary
Total monthly income.................... 1,075
Expenses (including HP & secured debts). 891
Available for debt repayments........... 184
Monthly UNsecured debt repayments....... 3,195
Amount short for making debt repayments. -3,011
Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total HP & Secured debt................. -0
Total Unsecured debt.................... -4,955
Net Assets.............................. -4,955

saltnvinegar

Hi Natasha

Thank you for your very comprehensive post. However you have kind of missed the point............!

My advice is for dealing with payday loan companies in exactly the scenario you are advocating, which is where you have got (or want) professional help in dealing with your debts and wanting to pay them back.

The problem I am highlighting is that most payday loan companies do not play fair when trying to deal with the big picture you describe, because their business model ensures they get their money before any of your other creditors, often leaving you with no money for the rest of the month to pay bills such as mortgage and food.

And so the cycle continues..........

If you had read my thread correctly you would have understood that my advice breaks this cycle, which then allows people the time and ability to get that professional help.

You state "debt advice company will take over all the liaison with your creditors "

This is true - but it will not stop a payday loan company from emptying your bank account using the recurring payment authority you have given them, even when they are liasing with that professional debt advice company.

You also state "dont use the advice in this thread as a sticking plaster or quick-fix"

I absolutely agree but again demonstrates you have missed the point nor have you read my thread properly. If you had done so you would have read the following piece:

So what do you do next?
So once your income is ring fenced you can now start prioritizing your debt.

If you have a DMP in place and is being dealt with by a 3rd party let them negotiate with the payday loan companies on your behalf. Don't be surprised if they send you letters stating they will continue to try for payment (what do you think would happen if you hadn't changed your bank account?!)

Most (though not all) will only start agreeing to a payment plan after you have defaulted. Again remember their business model. They are not geared up for this and will not want to do it. If you are doing your DMP yourself you will need to be in their face every day. Send a letter a day, send 2 if you have to but now you can deal with them in the same way you would deal with any other creditor as they will not be able to prioritize themselves when it comes to taking your money!!

---

The problem that people find who get the professional help we both advocate is that payday loan companies take no notice of them and continue to keep trying to take payments regardless.

Talk about playing fair?

I saw a post on here only 2 days ago where a lady telephoned a payday loan company to inform them she was not going to be able to pay them back as agreed, and wanted to come to an arrangement to pay, and was informed by the operator that '"He had a sister who worked for the police and he was going to call his sister and arrange to have her arrested at her desk at work".

There are too many posts on the MSE forums where people embark on DMP's with companies like the CCCS and Payplan, the very professional help we talk about, only to find that despite this, payday loan companies empty peoples bank accounts, while at the same time are in discussions with these companies to set up monthly payments.

This is not helping anyones debt situation is it?

Despite your eloquent post you offer no advice on how to prevent payday loan companies from doing this, and how to force the situation where they can then be dealt with in exactly the same way as your other creditors.

The advice offered, has, to my personal knowledge, helped 117 people break the payday loan cycle, and allowed them to seek professional debt advice and enable the payday loan companies to be treated fairly like any other creditor. I am sure it has helped many more.

While the banks provide any company with the method to take whatever they like, whenever they like, this problem will always exist.

As I have said, on numerous occasions (which you have obviously missed), if anyone can provide another tactic that prevents payday loan companies from using the recurring payment authority given to them to continue to keep trying for smaller and smaller amounts until they have emptied someones bank account, I would be all for it.

The best thing to do of course, is to change bank accounts with plenty of time before this starts to happen. But human nature being what it is, many people don't.

Best

SnV

eyeopener2

Superb post SnV.

saltnvinegar

Thanks Eyeopener

If memory serves you've experienced exactly the scenario I refer to also.

Best

SnV

SASHA11

Hi saltnvinegar,just been reading what u wrote about payday loans.would it not be easier to close down the account and open a new 1.Dont know whether im doing this right,or if u will read this...Not sure what im doing.Im in the same situation as most on here,hope u will reply