Expert: Ray A Miller - 10/12/2010

Question
"I had lost my job back in May, and was in the process of obtaining a new one(which I recently started this week...OCT 4), but while going through the searching and application process I went through my savings, 5 months is a long time, and the job market is bad here in CNY.  When I got the job my start date was pushed out and then I was told it would take 2 additional weeks after I started to get paid, so at the time, I was looking at 5-6 weeks before I would get an income stream, and like 200$ to my name, with bills to pay.  I thought a payday loan would be the easiest way to help me out, as my credit score it pretty low and wouldn't get me a personal loan.

I got the loans, and they put me on a weekly payment plan, starting that week ( i had though I was getting a few weeks before I had to pay ), and after the first attempt to collect the bombarded my account with attempted withdraws of money, racking up over 600$ now in NSF fee's.  And it just keeps getting worse, the calls come at all hours of the day/night.  I want to pay them off, it is my debt, but they are making it so any money i get goes right to paying the penalties and I cannot even touch the balance.  What should I do?  Cancel my checking?  I already have a negative balance on it, and wont be getting paid for 2 more weeks.  My job has a nice income, but after rent/car/student loans I wont be able to pay penalties and fee's and the loan balance, I am afraid I am in a spiral here where I am just outside the means to make ends meet.  I just don't want to lose my house or car, and the way things are, all money that goes into my account is instantly gone."

Answer
First, I will state the obvious, you have let these bottom feeders get you into a mess.  Call your states Attorney General and Consumer Affairs to see if these companies are licensed.  If they are not, you just have to pay the amount borrowed and not the interest and penlites.  

The only thing I can suggest is for you to get a loan and pay them off.  You may have to get a family member to help you.  Closing the checking account will not stop the calls and fees except the NSF fees at your bank.