Is New York legal for payday loans? I have many loans I'm unable to pay back and they are excessive. What do I do? I'm a NY state resident. I got a couple of Internet payday loans back in February. Since then, I've paid well past the principal balance on both the loans, as well as hundreds of dollars. I don't know if I could afford the loans any longer. Do you have the ability to offer any guidance regarding what I should do? Askbill - More Show less The small loans, sometimes known as "cash advance loans,"" "check advance loans," or "deferred deposit check loans" are often a source of financial trouble for consumers. The average of $300 loans come with a $15-$30 fee per $100 borrowed. The borrower will sign the check postmarked and then give it to the lender. The lender uses this information to transfer any payments or the total loan amount from the account of the borrower's bank. You can take the partial amount of money from your account through "customer Service". This is an especially perverse practice. The partial payment becomes a continuous installment that continues regardless of the best efforts of people who are the borrowers. With interest rates that high and the terms so condensed, it's no wonder that loans are typically repeatedly rolled over by the borrower. So, the annualized interest rate for the borrower can range from 390% to 780 APR, contingent on the number of times the principal is transferred. Payday loans are a lighthearted subject. Wikipedia.org the largest online encyclopedia, has payday lending listed under Loan Shark. It states that "if the defining characteristics for loan sharking are high interest rates and a credit products that entices debtors" then the classification is definitely applicable. Quick Tip New York law makes payday loans illegal. No debt collector is permitted to take any New York resident's payday loan. The New York State Dept. of Financial Services was directed by the governor to inform creditors that payday loans are illegal in New York. Financial Services to notify debt collectors that New York law prohibits the collection of payday loans. Make a complaint to the Department. If you are New Yorker and a collection agent attempts to collect payday loan from you, you may make a complaint to the Department. The Federal Trade Commission has a wonderful Web site about payday loan options. Payday Loans and Consumer Rights A payday lender may try to collect the debt. The payday lender may sell the loan to an agent for collection in the event that the borrower defaults. If the payday lender (or collection agency, for that matter) is unable to convince you of paying through traditional collection methods like letters and phone calls to collect, it could bring a lawsuit against you to recover the amount. If the lender is able to file a lawsuit against you and gets a judgment, it can take steps to enforce the judgment in civil court. The most popular methods used to enforce a judgment include wage garnishment (or bank account levies), and property lien. Not included on this list of actions to enforce your rights are making contact with your employer, calling your neighbors, or seeking a warrant for your arrest. The failure to pay back the loan is a civil matter that is not a crime. Payday lenders often use the threat of arrest in case of check fraud. This threat is not applicable if the payday lender is not able to prove that the borrower intended to pay back the loan. This is extremely difficult to prove. Recall that no one within the United States has been imprisoned or held accountable for debts prior to the Civil War. If a payday lender sells the account to collection agencies, the borrower must repay the remaining balance to them. Editor's note Comments on this page have been deleted. Payday loans gives information on how to collect payday loan collection. For more details on payday loan laws in the states of California, Florida and Illinois, Massachusetts, Missouri (New York), Texas, Virginia and Massachusetts Please visit Bills.com. A federal law known as the Fair Debt Collections Practices Act stipulates that third-party collectors must cease calling your phone when you notify them in writing. California, New York, Texas and Texas extend many of the regulations in the FDCPA to include creditors who are original. If you need advice on how to handle an agent of collection who is that is constantly harassing you, refer to Tips if You're Being Harassed by a Collection Agent. If the payday loan provider chooses to sell the account to a collection company, the debtor is able to stop the calls by sending a cease communications demand letter (also called a cease-and-desist notice) to the collection agency. (See the Bills.com debt self-help center for examples of cease-and-desist letters.) How Can I Handle Payday Loan Collections? Collection agencies for payday loans often employ intimidation to scare borrowers. But even if one is in debt does not mean that they're losing their rights as a consumer. As previously mentioned many payday lenders require that borrowers provide their checking account numbers so that payments are withdrawn from account of the borrower automatically through the Automated Clearing House (ACH). The payday lender could continue to attempt withdrawals even when the borrower's bank account isn't sufficient. This can result in charges for overdrafts for the borrower, and if done often enough the lender may decide to close the borrower's account. A common method to combat payday loan in new york (mosartagency.ru) lenders who frequently take money from a account of the borrower is to ask the borrower to close the account, and then reopen it with the same bank. This method is only successful if the bank links all transactions between the old and new accounts. In this scenario, the bank can simply access the new account to withdraw the funds. This is why it is important to ensure that your bank doesn't allow automatic withdrawals that automatically transfer funds to your new account. For more information about your rights as a New York resident read the Bills.com Article New York Collection Laws. New York Payday Loan New York has several laws which prohibit payday loans. In the New York General Obligations Law SS 5-501 the civil usury cap is 16 percent APR. The criminal usury limit is set at 25% in New York Penal Law SS 190.40, 190.40. New York law bars check cashers who have a deferred date to cash. What is the procedure for payday lenders in New York operate legally if payday lending is not legal? A lot of New York payday lenders have partnered with banks in other states. They provide loans through electronic transfers of funds. They claim that their local storefront broker loans to the bank which is exporting interest rates from its home state in the state of New York. New York. This is called rent-a-bank lending. The New York City Dept. of Consumer Affairs Tips about Payday Loans outlines New York law, and offers suggestions on how to avoid payday loans. You can also see the New York State Avoiding Dangerous and 'Predatory loans. More Payday Loan Information Find out more about the strategies and tactics for dealing with creditors in the Bills.com article on Debt Negotiation and Settlement Advice. Bills.com also provides more information on its Payday Loan Information pages and has answered readers' questions regarding payday loans in California, Florida and Illinois. Payday loan providers have many legal remedies if you do not pay the payday loan. They can be able to garnish your wages, levy or place a lien on your property. For more information on your rights as a creditor as well as a creditor, go to the Bills.com website. Collections Advice. You can also find the Bills.com Financial Planning and Budget Guide at free. This guide can aid you in managing your finances and teach you about financial planning and responsible financial management.