Need Consolidation Loan to Pay Off Payday Loans

by Joseph Pepper
(Albuquerque, NM)

I wrote out some payday loans to help family members out, was promised a repayment. Never heard from them again. I just couldn't pay them and now they are in collections.

I really need help, I am drowning in debt. If someone would just give me a chance to regain my trust and credit.

I have a car that I have never been late on the payments, no credit cards, I just have $6248.00 in collections including fees.

I am a 100% disabled veteran and receive monthly pay. Please consider me for a loan, I will not let you down.

Expensive and Painful Lesson about Loans to Family Members


I'm so sorry to hear about the problems you're experiencing.

It's very disheartening to hear that family members would take such advantage of you and put you in dire financial straits because of their own failure to meet their responsibilities. Sadly, it seems that family members sometimes feel they don't need to pay you back on any particular schedule (and sometimes, not at all). Have you made them aware that you are in the midst of collection actions because of their failure to repay you?

Unfortunately, I'm afraid this will be an expensive and painful lesson for you in the perils of making loans to family members. I understand you were trying to help family, and that's a natural tendency for all of us.

But there are a couple of things you could have done to better protect yourself. First, NEVER borrow money to loan to someone else. If you don't have the money to loan them, tell them you just don't have it, and they'll have to get it elsewhere.

If you do decide to loan money to anyone (including family) have them sign a promissory note to you, acknowledging that they borrowed the money from you and that they promise to pay you back on a certain schedule, or on demand. I would also have this document notarized (meaning they have to sign it in front of a notary public) so that they can't claim it was forged and those are not their signatures. You can buy promissory note fill-in-the-blank forms at office supply stores like OfficeMax. With that document, you could file suit against them in small-claims court (without an attorney) to try to recover your money.

The other thing you should do to protect yourself if you want to loan money to family members (which is usually not a good idea anyway) is to find the money somewhere other than via a payday loan. Payday loans are a BAD DEAL for everyone except the payday loan company. Avoid them at all costs.

You didn't tell me where you are in the collection process, and didn't leave any information that would allow me to contact you.

If you are served with a lawsuit over this debt, the worst thing you can do is to ignore it. Many collection lawsuits can be defeated if you will take action and oppose them. But if you ignore it and fail to answer in the time required by law (usually 20-30 days), then the other side automatically wins, and the court will order whatever they asked for.

In this situation you need someone to review the payday loan contract for you to see if there are legal issues with it (For example, is the interest rate legal in your state? Are the fees they've added on legal?).

You also need to have someone look at the collection methods that have been employed. It is likely that the collections people may have violated the Fair Debt Collection Practices Act, and if so, you may be able to sue them for as much as $2000 for their violations.

Bottom line is, you need legal help NOW. Depending on your veterans status (do you have a retired military ID card?), you may be eligible for legal assistance at Kirtland AFB. Call and talk to them about whether you are eligible for their assistance. If so, make an appointment with one of their attorneys. Having an attorney review the documents and make a phone call or write a letter may help. You might at least get them to waive some of the fees (but only if you can pay them off in a single payment, usually).

Contact the Mayor's Office of Veterans Affairs and ask if they have a referral for you to a legal aid office or some other agency that can review these documents for you and help you find assistance somewhere. They may be aware of other problems with this lender, and may be able to help you if you tell them what has happened.

Without reviewing all the documents and getting some more information from you, I can't provide any specific recommendations for you. But please get legal help somewhere before this situation goes from bad to worse - and it will!

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