Have you sent numerous letters to the illegal payday loan companies regarding payments? Are you still waiting for a reply from those companies? Well, most of the illegal loan companies don't give their physical address in their websites. So, borrowers like you are forced to send numerous mails after being harassed by them several times. If you have sent mails and stated that you wouldn't make further payments on the loan, then be prepared to get a late response from them. Moreover, the loan companies won't give you a positive response.
Illegal payday loan lenders don't follow the state rules and regulations. In addition to that, they ask the borrowers to pay a huge amount on the interest rates and fees. If you've already covered the principal amount, then you can write in the letter that no further payments will be made in future. You may check out the sample letter from here.
In all likelihood, the lenders will try to convince you that they don't need state license to carry on with their business. They don't come under the individual state laws either. They only follow the federal laws of the country. In such a scenario, send another mail and state that the contract is null and void. The lenders themselves have accepted that they don't have a state license. As such, the contract is not valid.
Don't lose your patience if you don't get a prompt reply from the lenders. Wait for a few days. The lenders will make several attempts to collect money from you before giving a reply. You may get a call from a collection agency regarding the debt. Send a debt validation letter to the collection agency immediately instead of negotiating with them. Illegal payday loans can't be validated.
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By signing up a debt counseling session, your provided details (Name, Email ID and Phone No.) will be forwarded to the company advertising on the DebtCC. However, you have no obligation to use their services.
Some creditors and collection agencies refuse to lower the payoff amount, interest rate, and fees owed by the consumer.
Creditors/collection agencies can make collection calls and file lawsuits against the consumers represented by the debt relief companies.
Debt relief services may have a negative impact on the consumer's creditworthiness and his overall debt amount may increase due to the accumulation of extra fees.
The amount which the consumer saves with the use of debt relief services can be regarded as taxable income.