In this post, I talk about defaulting on Payday Loans, what happened when I did and what I did to set up an arrangement to pay.
To start with I should say that I owe money to a fair few payday loan providers. I was quite silly and this is quite dangerous, especially when it comes to payday loans. The biggest problem with these types of debt is the interest. It soon adds up. Multiply that across a number of different loans and the outlook is quite bleak.
I suppose I should let you know who I owe money to. In no particular order I owe money to the following payday loan lenders: –
- Payday UK
- Payday Express
- Wageday Advance
- TXT Loan
As you can see, there are a few of them in the list above. I also have other debt as well but I will just focus on the payday loan debt for now. Feel free to browse this blog to find out more though.
When defaulting on a Payday Loan, it is important to remember that your credit rating will be affected and you may be charged additional interest and fees. It is not an option to be taken lightly. For me it was the only way I could regain control of things and escape the payday loan trap.
What I did when I decided not to carry on with paying my Payday Loans
The first thing I did was to open a new Bank account with Lloyds TSB. I then set about transferring my salary payment and direct debit payments to this new bank account.
I did this transfer myself rather than using the switching service because time was of the essence, and I didn’t have much time to sort things out (about two weeks before my payments were due was when I decided to default).
I could have reported my debit card lost but there would be no guarantee that my money would be safe hence me moving to a new bank altogether.
Not Paying the Payday Loans on the Due Date
When I stopped making the interest payments on my payday loans (rolling them over or deferring them) I fell into default. The expected phone calls started and I received letters and e-mails chasing payment.
I was tired of paying interest each month and I had put myself in a situation I could not recover from. It is my fault of course but I had to do this to start putting things right.
On some of my accounts, a default has been registered on my credit file but on others I cannot see one. However this may be that the data is just not available on the reports I am seeing. In any event my credit rating is toast so it makes no difference to me.
Setting up an arrangement to pay off my Payday Loans with the Payday Lenders
This was tricky because either I was ignored or my offers were not acceptable. I sent off the following documents (Click on the links below to view the examples): –
I did eventually make progress with Wonga, but that was it. The rest of my payday loan debts went to external debt collection agencies (this was not a bad thing in my experience).
Payday Express Emptied my Account
Despite moving bank accounts, and having no money in my old bank account Payday Express forced through the collection of the payment. This resulted in my old bank account going overdrawn. If you would like to read more about this see below.
Setting up an arrangement to pay off my Payday Loans with the Debt Collection Agencies
As explained above, I either heard nothing or my offer was not acceptable. In the end I waited for the external Debt Collectors to contact me.
When they eventually did, I followed the process outlined above and my repayment offers were accepted. In other words I completed the income and expenditure form and the offer of repayment letter, posted it off and waited for a reply. Shortly after sending off my offers of repayment, letters confirming the arrangement started to land on my doorstep.
It took between three to six months for all my accounts to be passed to the debt collectors.
I am still making payments to this day and have little problems so long as I stick to the agreed monthly payments. Life is much better now I have taken control of these payday loans. It is also nice to see the balances reducing each month.
Thanks for reading. If you have any questions please let me know.