While today’s economy may be getting better for some of us, the fact is that there are still millions of Americans struggling with debt. Payday loan lenders, as well as all over the U.S., have seen a huge rise in the amount of people turning to short-term cash loans to meet emergency financial needs as well as their monthly budget. When faced with the inability to make payments to creditors, we look at all of our options in an effort to make good on our debts and avoid defaulting on loans. That can include taking out a fast cash payday loan to get through the month. But what happens if you find yourself in the position where you can’t payoff your payday loan lender?Debt collections settlement has become one way for consumers to find that “happy medium” with their creditors while keeping above float with their finances. If it’s a credit card that’s seen one too many swipes or a cell phone gone wild, chances are that offering up some form of retribution on what you owe may be done via debt collection settlement. But what about the debt you owe on a payday loan? If you have hit the end of the road and no longer know what to do about those endless collection phone calls and letters, it’s time to take action.The first thing you need to know about debt collection settlement with a payday loan lender or any other creditor, is that it is a last resort. If you have already tried to make payments to your lender and continue to go into default, chances are your account has gone to collections. Many lenders use “in-house” collections while some will sell off defaulted loans to a third-party collector. The first thing you will have to find out is who you are trying to settle with: the lender that originally gave you the loan, or a third-party collector. It’s always important to know your consumer rights when it comes to collecting on a debt. While there are many honest and forthright debt collectors out there, it’s still wise to know where you stand in this type of situation.Once you have determined you are dealing with your payday loan lender directly, consult your budget before calling them to come up with an amount of money you are able to offer on the settlement. Be realistic and don’t offer more than you can actually pay. Start by offering less so you have room to negotiate and don’t ever give an outside collector your bank account or employer information.While most payday lenders don’t report negatively to the three major credit bureaus, it is still a good idea to ask your lender if they have reported anything on your credit report. While any type of negative information reported before the settlement cannot be removed, you can still work on raising your score once everything is said and done. If you are dealing with a collector, ask that they remove any negative information reported since they took over the debt from the lender. Be sure to monitor your credit report to make sure the negative information was in fact removed.Lastly, don’t give the lender or collector any money until you have a settlement agreement in writing. If you desire, you can consult with a consumer law lawyer to look over the agreement. Once you have it in writing, have read over it before signing, and have made a copy for your records, you can pay off your debt and move on. If the lender or collector refuses to give you an agreement in writing, make a copy on your own and sent it to them via certified mail with a return receipt requested. Be sure to make good on the settlement as this may be your last option to taking care of that debt once and for all!