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What Can I Do if a Payday Loan Provider Threatens Court Action?

(This is a guest post)

Hard-working people are facing a very tough time these days. A prolonged period of economic turmoil, coupled with stagnant wages and the recent banking crisis has made life very difficult for millions of people.

Banks and other traditional financial institutions have tightened their lending criteria considerably – forcing many people into seeking financial help from payday loan providers. Most of these companies make their money from people who struggle to repay their loans rather than those who can afford them, and this is leading to an increasing number of cases reaching the County Courts of the UK. However, consumers who know where to turn for help and assistance could ensure that a visit to the local court is not necessary.

Seek Written Clarification and Proof of the Debt

You are legally entitled to a full explanation of the debt being claimed, as well as a full schedule of the interest charges applied. You should seek this clarification in writing, but make sure you send your correspondence by recorded post and retain copies of all your communications. A creditor’s failure to provide this could lead to the debt being written off.

Negotiate Directly with Your Creditors

The best way to keep the situation out of court is to come to an agreement with your creditors. Many loan providers can be persuaded to freeze interest charges and reduce monthly payments if a promise of regular payments is adhered to. Creditors understand that taking the matter to court will rarely result in the total amount owed being recouped

Arrange a Legal Alternative

If you simply don’t have the money to repay your payday loans, you have the option of an Individual Voluntary Agreement (IVA) if you owe money to two or more lenders. Such an agreement is legally binding, and it takes into account your ability to pay. An acceptable amount is agreed upon, and any debt remaining at the end of the agreement is written off. In more severe situations, a Debt Relief Order (DRO) could allow you to write off a significant portion of the debt, leaving you with repayments you can afford. Creditors must stop contacting you if a DRO has been issued, and you should contact your local Financial Ombudsman if they continue to do so.

Be Prepared for Doorstep Agents

Some unscrupulous lenders will employ doorstep agents in order to intimidate debtors. While the law doesn’t prohibit this – unless an IVA or DRO is in place – you should be aware that these people are not bailiffs. They have absolutely no legal right to enter your home or demand immediate payment. Only if a bailiff has a court order can they gain access to your home – but you can still legally refuse them entry unless a court specifically gives permission to forcibly enter your home.

Seek Help from the Professionals

The law surrounding debt is a minefield, and many people simply aren’t sufficiently confident or knowledgeable to take on lenders themselves. Fortunately, help with debt is available from experienced payday loan debt management companies. Agents from these organisations will talk you through your legal rights, and in many situations they will deal with creditors on your behalf.

A debt specialist can lead you by the hand towards a life free from the chains of debt. Whether they renegotiate your repayments or advise a payday loan debt consolidation programme, they are there to ensure you can look forward to a financially secure future.

1st Point Debt Solutions offers debt management solutions to help you resolve your debt problems.  If you require help on your payday loan debt, please visit

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Clever Dude

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