Are you able to take out payday loans in New York? I’ve got a lot that I can’t repay and they are too much. What can I do? I’m a NY state resident. I took out online loans for payday loans. The principal amounts of both loans were completed in February. I’m not sure if I could afford the loans any more. Would you be able to offer any guidance as to what next? Askbill – More More details The small loans, called « cash advance loan », « check advanced loans, » and « deferred deposit check loans » typically pose an issue for people. A loan amount of $300 can be subject to a fee of $15-$30 for every $100 borrowed. A post-dated check is presented to the lender by the borrower. The check is later used by the lender to transfer electronically the money or the whole amount of the loan from the account of the borrower. You can make the partial amount of money from your account as a « customer Service ». This is a very baffling procedure. The partial payment is a permanent installment and continues regardless of the borrower’s attempts to stop it. With rates this high and the term of the loan being so brief, there is no wonder that a large proportion of these loans are carried over by the borrower again and again so that the accumulated fees equal an annualized rate of 390% to 780% APR based on the amount of times the principal is transferred. A humorous fact about payday loans is that Wikipedia.org is the most popular online encyclopedia of the world, lists payday lending under Loan Shark, stating that « if the most important features of loan sharking are high interest rates, and a credit product that traps debtors, then the label certainly applies. » Quick Tip New York law prohibits payday loans. A debt collector can’t take or attempt to take over the New York resident’s payday loan. In February 2013 the governor of New York directed the New York State Dept. Financial Services to inform debt collectors in New York that payday loan collection is not legal. The Department. of Financial Services if a you are a New York resident and a collection agent tries to collect cash from you for a payday loan. The Federal Trade Commission offers great information about payday loans alternatives. Consumer Rights and Payday Loans A payday lender could try to collect the balance itself. If the borrower defaults the payday lender can sell the balance to a collection agent, which we discuss later. If the payday lender (or collection agency, for that matter) is unable to get you to pay by using standard collection tactics such as letters and phone calls to collect, they may sue you to recover the amount. If the lender decides to sue you and obtains a judgement, it can take steps to enforce the judgment in civil court. The most popular methods used to enforce a judgment are wage garnishment (or bank account levies) as well as property liens. It is vital to keep in mind that actions to enforce your rights such as calling your employer, contacting neighbours, or obtaining warrants to arrest you aren’t included in this list. Failure to pay a debt is not a crime and is instead a civil issue. Payday lenders are frequently threatened with arrest for fraud on checks. This is not true, since the payday lender has to be able to prove that the borrower did not intend on to pay back the loan. It’s hard to establish this. This is because no one has been detained or imprisoned by the United States government for any reason since the Civil War. If the payday loan business sells an account to a collection agent, the borrower is now legally bound to pay the balance to the collection agent. Editor’s note Comments on this page are closed. Payday loans explains how to get payday loan debts paid. Take a look at the Bills.com information on payday loans in California, Florida. Illinois. Massachusetts. Missouri. New York. Texas. To find out more about payday lending laws in those states, go here. Federal law, known as the Fair Debt Collections Practices Act or FDCPA (Fair Debt Collections Practices Act) stipulates that third-party collection agents must cease calling you if they are notified in writing. A lot of FDCPA regulations are extended to original creditors of several states such as Texas, California, New York and New York. Read the following advice if you’re Victimized by a Collection Agency to learn about the steps you can take if suspect that a collection agent is violating the FDCPA. If the payday loan provider chooses to transfer the account to a collection agency, the debtor can end the calls by sending a cease communication demand letter (also called a cease and desist notice) to the agency. Sample cease-and desist letters can be found at the Bills.com debt self help center. How do I deal with payday loan collection? Collection agencies for payday loans often employ intimidation to scare borrowers. The rights of consumers aren’t affected by being in debt. As stated above Payday lenders can ask borrowers to provide their checking account numbers to enable automatic withdrawals from borrowers’ accounts through the Automated Clearing House. Payday lenders will attempt to take money from the accounts of borrower who do not have enough funds. This could result in overdraft fees for the borrower, and should it be repeated enough often the bank could end the borrower’s loan. The borrower is able to close one account with a bank and reopen the other to stop payday lenders who keep withdrawing funds. This is only possible if the bank links all transactions from both accounts to the new account. If this happens, the bank simply goes to the new account to withdraw the funds. This is a lesson to make sure that the lender does not allow electronic withdrawals of the old account to be transferred automatically to the new one. Find out more about the rights you have as a New York as a resident by studying the Bills.com article New York Collection Laws. New York Payday loan New York has several laws which ban payday loans. New York General Obligations Law Section 5-501 defines the rate of civil usury at 16 percent. New York Penal Law SS 190.40 & 190.40 sets a 25 percent APR limit on criminal usury. New York law bars check cashers who have a deferred date to cash. What is the legal standing of payday loans in New York? New York payday lender partners with banks from deregulated states. They make loans through electronic funds transfer. They say that the local shopfront is brokering loans on behalf of the bank, which exports the interest rates of its state and other terms from New York. This is known as rent-a-bank lending. The New York City Dept. Consumer Affairs Tips about Payday Loans in New York State outlines New York law and offers guidelines on how to avoid a payday loan in new york – daewooespero.ru – loan. The New York State Prevention of Dangerous or Predatory Loans is available. More Information on Payday Loans Read the Bills.com article on Debt Negotiation and Resolution Advice to find out more about tactics, strategies, and how to deal effectively with creditors. Bills.com offers additional information about the Payday Loan Information section and addresses questions of readers regarding payday lenders across California, Florida. Illinois. Massachusetts. Missouri. Texas. If you don’t pay back your payday loan the payday lender offers a variety of legal remedies such as wage garnishment, levy, and lien. To learn more about your rights as a debtor and creditor, visit the Bills.com website. Collections Advice. Also, check out the no-cost Bills.com Financial Planning and Budget Guide, which can help you manage your finances. You can also learn about budgeting and prudent financial management.