If you’re one of the millions of Americans who are drowning in payday insurance debt, you’ve probably already thought about seeking help from a consolidation company. You’ve done all the work you had to do to gain the upper hand on your payday lenders: you searched online for a good and reliable company, you filled out all the paperwork, and finally, you’re ready to take back control of your money. Then all of a sudden, lenders tell you something that’s stopping you from getting in your way. One simple phrase that can make anyone who owes a debt utterly despondent: “We don’t work with consolidators.”
Is this correct? If payday lenders don’t work with consolidation companies, why do they exist? Here are the three main reasons why your lenders will eventually work with your consolidation company.
1. Before you enroll in a debt assistance program, the first thing that payday insurance consolidation companies advise you to do is close the bank account that lenders have access to. Although consolidation companies send legal documents to payday lenders to revoke their authorization to automatically debit your bank account, it is necessary to close your bank account to ensure that no unauthorized charges come out of your account.
2. The payday insurance consolidation company will also send the legal documents to the payday lenders to cease and desist from further communication with you. According to the Federal Trade Commission, lenders are required to follow certain rules and regulations when collecting debt. If payday lenders don’t follow these rules and continue to make annoying phone calls, lenders can be fined $1,000 for each phone call they make. Since most insurances are small in size (between $200 to $1,000 USD), contacting you becomes a risk that is not worth the risk.
3. Many are afraid of being sued if they do not pay off their payday insurances. Most borrowers are unaware that most payday lenders (especially online) are not authorized to lend money to people residing in the United States. This means that payday lenders do not have the ability to refer non-paying customers to small claims court for a payday insurance. Payday lenders often use this tactic to scare and pay borrowers, and it is effective because most clients are not well aware of what lenders can and cannot do.
Now, sit back and think about this for a moment: your payday lenders can’t debit your bank account for payment, they can’t call you to ask for money, and they can’t sue you for the outstanding insurance. Otherwise, how will they get paid? Who else can they turn to? There is only one answer: payday insurance consolidation companies.
So why would payday lenders refuse to work with mergers in the first place? it is easy. Obviously, people who sign up for consolidation companies have many payday insurances. As a matter of fact, people who are overwhelmed with payday insurances usually get between two to twenty payday insurances. Usually, mergers work from one lender to another, which means that if you’re a payday lender, you won’t be sure when you’ll get the money. Payday lenders are aware of this and know that chances are, they could get paid faster if there was no third party involved. For this reason, they claim that they do not work with payday insurance consolidation companies, although they eventually will.
Don’t let payday lenders intimidate you until you know all the facts. If you’ve tried everything you can to get rid of payday insurance debt on your own but failed, then perhaps it’s time to seek professional help. After all, who wouldn’t benefit from a little help once in a while?