Summary. Fifteen sequences. §1 today, because bank fees compound in days.

1. TODAY — stop the debits

  • Write to the lender: "I revoke any and all authorization for electronic fund transfers from my account ending [____]. Do not present any check or initiate any ACH debit." Send with proof of date.
  • Write to your bank revoking the authorization and placing a stop payment
  • Call both and get confirmation numbers
  • If debits continue, ask about closing the account and opening a new one
  • Ask the bank to reverse NSF fees generated by repeated presentment
  • Understand: this stops the debits, not the debt
  • Note: conditioning credit on preauthorized electronic transfers is prohibited by federal law — a violation worth citing in a complaint

2. The two-minute lawfulness check

  • Is the lender licensed in your state? Search the state financial regulator's licensee database. In many states an unlicensed small loan is void or unenforceable, interest is forfeited, and payments may be recoverable.
  • Does your state cap the rate on loans this size?
  • Does your state limit rollovers? How many?
  • Does your state require a cooling-off period between loans?
  • Does your state limit simultaneous loans or require a database check?
  • Are you an active duty service member or dependent? → the 36% all-in cap applies, arbitration clauses and allotment requirements are prohibited, and a violation makes the agreement VOID FROM INCEPTION. Call base legal assistance — free.

3. Get the transaction history

  • Request in writing: each loan (date, principal, fee, due date) · each rollover, renewal, or refinance · each payment and how applied · each fee · each presentment including failed attempts · current balance and composition · each loan agreement · the state license number
  • This is where the violations live — same-day repay-and-reborrow, rollovers past the limit, and simultaneous loans are only visible across the whole pattern
  • Compare the history against §2's rules

4. Ask for the extended payment plan — by name

  • Many states require lenders to offer one on request, frequently at no additional fee, over several installments
  • Request in writing: "I am requesting the extended payment plan available under [state statute]."
  • Ask for confirmation that no further presentment will occur and no additional fees will accrue
  • If refused, ask them to state that in writing and identify the authority — then complain

5. Refinance out — anything below what you're paying

  • Call three credit unions and ask: "Do you offer a payday alternative loan or small-dollar loan program? I'm trying to retire a high-cost loan."
    • Ask what is required for membership — most people qualify for several and know about none
    • Many will lend specifically to retire high-cost debt, some paying the lender directly
    • Damaged or thin credit is frequently not a bar in these programs
  • A community development financial institution
  • Your own bank's small-dollar product — ask; it is rarely advertised
  • An employer advance or a no-fee employer earned wage program
  • A documented family loan
  • A credit card cash advance — at 25–30% it is roughly one-fifteenth the cost
  • And call 211 or the county community action agency about the underlying expense — utility, rent, medical. The loan was for something.

6. Title loans — before default

  • Get the payoff amount in writing
  • Find out the vehicle's actual value — frequently several times the loan
  • Seriously consider selling the car yourself: retire the loan, buy something cheaper, keep the difference. Almost always better than repossession, and structurable through a dealer or with payoff at closing.
  • Ask for the extended plan
  • Assume the lender knows where the car is

7. Title loans — if repossessed (act within days)

  • Retrieve personal property immediately — tools, car seats, documents, medication. It is yours and the lender must make it available.
  • Ask in writing about redemption — most states give a right to redeem before sale on payment of the amount due plus reasonable costs. Get the figure and the deadline in writing.
  • Demand the pre-sale notice — most states require written notice of the time and place of sale
  • Insist on a commercially reasonable sale
  • Demand a post-sale accounting and the surplus — check whether your state requires it
  • Document how the repossession happened — a locked gate opened, a garage entered, a confrontation. Breach of the peace makes a repossession wrongful, creates damages, and can defeat a deficiency.
  • Photograph the vehicle's condition if you can

8. Collection conduct that is unlawful

  • Threats of arrest or criminal prosecution. A post-dated check given as loan security is generally not a criminal bad check. Report it.
  • Calls to your employer or relatives about the debt beyond limited location inquiries
  • Repeated presentment designed to generate fees
  • Threatening garnishment without a judgment
  • Misrepresenting the amount or legal status of the debt
  • Continuing contact after a written cease-communication request to a debt collector
  • Document every violation: date · time · number · name · exact words. Statutory damages plus attorney's fees make these claims economical.

9. Where to complain — all free

  • State financial regulator (the licensing authority)
  • State attorney general
  • CFPB
  • Your bank, for presentment fees
  • For service members: base legal assistance

10. If you are sued

  • Calendar the answer deadline the day you are served
  • File an answer — a default judgment converts a contestable debt into a garnishment
  • Defenses: unlicensed lender · rate exceeds the state cap · rollover pattern violated the statute · fees exceed the statutory schedule · assignee cannot prove the chain · Military Lending Act voids the agreement · statute of limitations · improper service
  • Serve discovery for the complete transaction history and the assignment documents
  • Do not make a partial payment on an old debt — it revives the limitations period in many states

11. Triage, if nothing closes

  • Housing and utilities first — losing the home or the heat is categorically worse
  • The car, if it is how you work — but consider selling it yourself
  • Court-ordered obligations with contempt exposure
  • Secured debt you intend to keep
  • Then unsecured — including the payday loan, which is at the bottom, because the worst realistic outcome is a judgment, not eviction
  • Protect exempt funds: Social Security, SSI, VA, and certain federal payments are exempt; keep them in a separate account — commingling defeats automatic protection
  • Know what a judgment does: garnishment (capped), bank levy (exemptions must be claimed on a short deadline), sometimes a property lien. NOT arrest.
  • Talk to a nonprofit credit counselor — free or low cost, no advance fee
  • Consider bankruptcy — payday loans, title deficiencies, medical and card debt are general unsecured debt, dischargeable in Chapter 7; filing triggers an automatic stay. Most consultations are free.

12. Credit repair — the statute

  • No company may lawfully charge or receive payment for credit repair before the service is FULLY PERFORMED. A monthly subscription paid in advance is exactly what the statute prohibits.
  • A separate written disclosure of consumer rights must be given before any contract — stating you can dispute inaccurate information yourself, directly, for free
  • A written contract with specified terms is required
  • A three-day right to cancel is required
  • Prohibited: untrue or misleading statements to a bureau, creditor, or consumer · advising a consumer to make one (including "new credit identity" advice) · any fraud or deception
  • Remedies: actual damages or the amount paid · punitive damages · attorney's fees. Waivers are void.

13. What actually improves a credit report — all free

  • Pull all three reports — they differ
  • Dispute inaccuracies with the BUREAU, not just the furnisher, and with each bureau separately
  • Look for: accounts not yours · wrong balances · a paid account showing a balance · a discharged debt not marked discharged · duplicate reporting by creditor and collector · a date of first delinquency later than it should be · an account shown open that is closed · unauthorized hard inquiries
  • Check the date of first delinquency on every negative item — it controls when the item falls off, and re-aging is both inaccurate and correctable
  • Get obsolete items removed when the reporting period has run
  • Block identity theft items with an identity theft report
  • Negotiate with creditors directly and ask for deletion in writing before you pay
  • Pay down utilization — it moves scores fastest and responds within a billing cycle; a credit limit increase without borrowing more does the same
  • Keep old accounts open
  • Add a consumer statement where a dispute failed
  • Then wait. Nothing lawful accelerates time.
  • For help: an accredited nonprofit credit counseling agency — free or low cost, no advance fee

14. Adjacent products — the same three questions

What is the all-in APR? What happens on default? What state law governs it?

  • Earned wage access — employer-integrated with no fee is useful; direct-to-consumer with fees and "tips" can price at triple digits
  • Buy now, pay later — late fees, stacking across retailers, auto-debit on a short account, weaker dispute rights than a credit card
  • Refund anticipation loans — free filing exists; direct deposit brings most refunds in weeks
  • Pension and structured settlement advances — structured settlement transfers require court approval in nearly every state
  • Rent-to-own — ask for the cash price and the total of payments; the ratio is routinely 2–3x
  • Pawn — expensive, but no personal liability and no deficiency; the loss is the item
  • Bank and credit union small-dollar products — frequently the cheapest option and almost never advertised

15. Before borrowing again

  • Do the APR arithmetic, not the fee arithmetic. $45 on $300 for 14 days ≈ 391%.
  • $45 every two weeks is roughly $1,170 a year on a principal that never shrinks
  • Call a credit union first — the payday alternative loan exists
  • Call 211 about the underlying expense
  • Ask the actual creditor — utilities, medical providers, and landlords negotiate far more readily than borrowers expect
  • Check the lender's license before signing, not after
  • The intervention point is week three, not day one

Related documents

Educational only, not legal advice. Small-dollar lending is primarily state law and the variation is enormous. Check the rate cap, licensing requirement, rollover limits, and title loan redemption rules in your state.