Can I close my accounts before negotiating settlements with several payday loan companies?

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Can I close my accounts before negotiating settlements with several payday loan companies?

I have several on-line payday loans and plan to work with a debt reduction company to pay them back. I have been advised to close my accounts before having them workon negotiating a settlement. Is it legal to close your accounts like this? I don’t want any trouble; I just want to get out of this cycle.

Asked on July 15, 2011 under Bankruptcy Law, New York

Answers:

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

To answer your question, you need to carefully read the written agreement that you may have with the pay day companies that you have been negotiating a settlement with. Assuming there is a written agreement, most likely its terms will control about closing your accounts or not. If there is no written agreement with the pay day loan companies, does closing the accounts simply prevent you from getting future money and nothing else?

If so, then there seems to be no reason why you could not close your accounts if you no longer need them. From what you have written, it does not seem wrong to close the accounts. Read your contract before you do so.

Good luck.


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