Financial Advice

I’m So Scared to Stop Paying My Payday Loans

Question:

Dear Steve,

I have got in over my head on payday/installment loans. Im to the point that I can’t even afford to pay my regular bills because each week payments are coming out on these loans. I know I owe the money and understand it needs to be paid. but my biggest fear is if I close my bank account to stop all this, will I get arrested?

I have read some scary stuff that has happened to people. But I’m going to lose my house, car and have nothing if I continue this. So I thought if I closed my bank account, I could get back on my feet. Then try to deal with them. Or have them go to collections, then contact an agency, like consumer credit counseling or something to get them paid back.

But like I said, I’m so scared of this coming back and getting me in trouble with the law I have never even had a speeding ticket so this scares me. Can you advise on this or tell me the laws regarding payday and installment loans?

Can you get arrested for cancelling your bank account to stop payday and installment loans?

Linda

Answer:

Dear Linda,

You’ve got a lot going on and it certainly sounds like you are dealing with this out of fear and emotion.

It sounds as if you were trying to deal with a financial shortfall by taking out expensive payday loans. And you’ve already admitted you can’t pay your regular bills.

So as far as trying to pay your way out of this jam and live safely, I would put that in the highly unlikely basket.

Before you leap to do anything, let’s get a plan in place that makes sense.

There is only one solution that would keep you out of collections and prevent you from being sued. I would advise you to meet with a local bankruptcy attorney and talk to them about legally discharging your debts under the legal protection of bankruptcy. You should read How to Find a Great Bankruptcy Attorney.

I love practical solutions that address the problem and resolve it so people can move forward with a better life. And I’ve got to say, closing your bank account and then running for cover does not fit that strategy.

Go explore your available legal protections available in bankruptcy and then come back and post an update in the comments below.

Steve Rhode
Get Out of Debt GuyTwitter, G+, Facebook

If you have a credit or debt question you’d like to ask, just click here and ask away.

This article by Steve Rhode first appeared on Get Out of Debt Guy and was distributed by the Personal Finance Syndication Network.

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