Payday Loan - Debt

robpanda

I was wondering if anyone could help me or give me some advice.

I am going to default on 2 payday loans at the end of the month, as i haven't got the money to pay them. I have to pay my bills and living expenses and wont have any money left to pay the payday loan companies back.

I owe £500 to Payday Express and £500 to Tooth Fairy Finance.

I have accepted I cannot pay them, and nobody can help me pay them back i.e family & friends.

I am resigned to facing the consequences.

Can someone give me advice on the following?

• How will the Payday Loans pursue me?
• Will they get bailiffs to come to my house?
• Will they take me to Court?
• Should I get ready to contact a free charity debt consolidation company to help take the stress away? I understand they will deal with the companies for me?

I know i need to pay all my important outgoings first i.e rent. I can afford to pay them a lower monthly re-payment each month, but i am guessing they won't entertain this quite so easily.


I need some advice on what will happen and what to expect? Some guidance would be useful. Need Guidance. Trying to get prepared. This is unknown territory especially on the payday loans.


Any help and advice would be appreciated?

billinghamfan

if you look at my threads you will see what happens with tooth fairy.

FireWyrm

There are a number of things you can do to mitigate the fallout.

1) Get a new bank account not affiliated with your current one. Move ALL of your running expenses and income to there...do that now.

2) Cancel your overdraft if you have one on the old account and leave nothing but a nominal amount in there.

3) When you have done the above, WRITE to both detailing your situation and advising what plan you have in place to pay them back.

PDLs are famous for being less than helpful, so a few things to understand before you take this course of action.

1) The second you tell them you are about to default, they will attempt to take the WHOLE outstanding balance immediately

2) They CAN and WILL continue to ping any account you have advised them of in the past regardless of whether it is affiliated with this loan or not. Likewise, there have been reports of them dinging other accounts which are with the same bank but owned by you.

3) They are not supposed to take money which is a benefit (ie Tax Credit etc), but they WILL try. You must protect yourself against this.

4) Post Office accounts are good zero issue accounts to use for this purpose if you have a terrible credit rating.

5) The very existance of a PDL on your credit file, satisfied or not, let alone a default will all but ruin your ability to obtain credit for about the next year...or more depending on how paranoid the lender is.

6) PDLs will ding your credit file as a default every month they are not paid. Accept it. Your credit file is gone which most people shouldnt see as necessarily a bad thing.

7) You must inform the PDL that you will only engage in WRITTEN correspondance. Do NOT engage over the phone, via email or any other method that cannot be traced. If you must send documents, send two versions posted from two different places. PDLs will claim to have 'lost' documentation.

8) DO NOT sign anything! Use an electronic signature or just your name.

9) They will send Debt Collectors. These ARE NOT bailiffs and have zero rights of entry.

10) PDLs are very likely to engage in a campaign of harrassment and will phone you all day every day and even your work number if they can get it. You have a right to complain about harrassment but it rarely does much. I would simply change your telephone number. You can do this for free once with BT if you claim you are receiving nusience calls.

11) Stand your ground, do not be intimidated. You are a debtor, not a slave. They owe you courtesy and consideration and you have every right to expect fair treatment. Threaten and then do report them to trading standards if they step outside normal reasonable behaviour.

12) They are required to consider all sensible payment plans put forward in writing. They may twist and bleat, but ultimately, what you can pay is what is reasonable...not what they dictate.

robpanda

Thank you for the advice. These Debt Collectors actually turn up at your door? And what are your thoughts on the debt consolidation companies that are free and deal with the creditors?

billinghamfan

CCCS are good that is who I use, however Toothfairy will not deal with them and just harrass you I now owe £1750 the original loan was £300 in Feb.

I suggest you call CCCS, follow FireWyrm's advise and write a formal complaint as soon as toothfairy step out of line which will be in about a month's time then you can make a complaint to the FOS 8 weeks later, like I am doing now.

FireWyrm

Debt Consolidation companies are a scam. They are anything but free and you will usually end up paying admin fees which are far larger than the original debt. They also do nothing you couldnt do yourself, much like Estate Agents. The creditor is required by law to weigh the merits of all written repayment plans regardless of source, so the idea that you HAVE to go through a consolidation company is nothing but industry back-scratching.

However, if you feel you need an advovcate, then speak to a Debt CHARITY who are more helpful. They truly work on your behalf and do not charge...although I might be tempted to make a donation to them for their time and effort on my behalf.

What is likely to happen is that the PDL will do the following :

1) Attempt to collect on the due day
2) Dig your account for the whole amount
3) Attempt to ding your account for a lesser value until they get a bite
4) Start ringing you
5) Keep ringing you until you answer them
6) Give you a run around, threaten you and try to make you pay by using scary words like 'solicitor' and 'additional fees' and 'default'.
7) Sell it to a DC agent who will attempt to collect.

When the DC comes to your door, they have as much right on your property as the paperboy. They cannot force entry, you are under no obligation to speak to them. In fact, you could pretty much ignore them and there's little they could do.

However, sometimes, very rarely, the PDL tries to seek Bankrupsy against you but you'll be warned long before that happens. Bottom line, if you end up in court, as long as you can show you have taken reasonable steps to pay them back at a rate you can afford, there's sweet FA they can really do about it...other than slap you with defaults every month.

You would howeve, be well advised to pay them off as fast as humanly possible just to get rid of them. PDLs are known to fight dirty, so be prepared for it.

robpanda

What am i looking at down the line? Worst Care Scenario. A monthly repayment dictated by a court or a debt recovery agency? Is that Right?

FireWyrm

Probably being harrassed by a debt recovery agent. Worst case is a sneaky bankrupsy order, but you can have that set aside, I wouldnt fret over it just yet. A court wouldnt dictate a payment schedule I dont think, they would ask for written evidence of income and expenditure.

Bottom line is, if you dont have it, you cant pay it. PDLs can threaten but it's mostly just bluster. My serious advice is to get yourself out of this asap. Default anyone but Rent and Council Tax in favor of paying the PDL instead. Personally, I would rather have a couple of really unpleasant months money wise than have to put up with the hassle they are about to rain down on you. That doesnt mean you should be intimidated or frighted, just prepared....if there's any way you can avoid it, do so.

...and never use a PDL ever again.

robpanda

Are debt recovery agents more likely to accept a monthly affordable repayment? If the Payday Loan Company sells it to them?

FireWyrm

No...but they dont have much choice if that's all there is. None of your creditors will be happy about this, it's just a case of finding the least unreasonable to deal with.

I re-iterate...if you can, avoid this entirely by paying quickly. Sacrifice anything you have to do it. Is there something you can eBay for instance? A piece of gold you can sell? Perhaps you can cut back on your grocery budget? You havnt posted an SOA so we have no idea of your actual spending habits, but my experience is that most households have a considerable drip expense which they are selectively blind to. First step is to honestly and completely examine your spending...is there any slack in your budget where you can make the money up.

Long before you get to deal with a DC, the PDL will have spent some energy making your life difficult.

robpanda

Would paying one off be better than having two? I mean i could possibly pay one off potentially. but i read you can only have a debt consolidation help if you have more than 1 debt? - confused a little. And do you reckon it would be better to pay off tooth fairy or payday express?