Getting into debt is never a place people want to be. Sometimes, a short-term loan, like a payday advance, can help get you from one check to the next. Provided they are used constructively, they can be an effective tool at managing a shortfall in finances.
If you happen to become overdue with payments to a payday loan company, not only could the interest continue to grow, but there may also be delinquency fees. Your best bet is to use a state licensed lender who will follow strict guidelines when it comes to repayment and fees.
If your payday loan company tells you they will garnish your wages, here are a few items to keep in mind when dealing with that situation.
Can the payday loan company garnish your wages? This all depends upon the state law, so it’s best to check with your state legislature. If it is allowed by your state, a lender would need a court order to garnish your wages. This is the main reason why it would only be used as a last resort.
If you happen to become past due on a payday loan, most lenders will try to handle the situation internally. A reputable lender will work with you to try and workout a repayment plan that works for both parties. Their ultimate goal is to retrieve their funds while also maintaining a good relationship with the customer.
This is another reason to work with state licensed lenders, as there are provisions built into many state laws to help protect the consumers. Extended payment plans without additional fees are used by many states to help insure the consumer has a fair chance to repay the loan.
Typically, once the loan company believes they will not be able to obtain the funds, they will simply send your debt to a collection company. This is where things could escalate to another level.
A debt collector does have the ability to take you to court, if allowed by the state, to settle the debt owed. As a rule, if the person in debt doesn’t show up for their court date, then things move to the next step.
Once this happens, the judge will usually issue a summary judgment and that allows the court to begin collecting the debt on behalf of the lender or collections agency.
This may vary from state to state, but it could mean bank account levies and wage garnishment. Once that happens, you no longer have the option to miss the payment, it will be taken from your wages, not your account.
No one plans on defaulting on their loan, but it is important to make alternative arrangements with your financial company if you get behind. You don’t want it to come down to having the government step in and take money before you ever get it.
Having your wages garnished will make an already difficult situation even worse. It is in your best interest to make the payment any way you can or try and negotiate with the lender to make sure you stay on track.
It’s important to know what types of loans are available and which one will be best suited for your situation. Here at Lending Bear, we have several options for emergency cash that are fast and easy to understand. Apply online today.