Many payday loan consumers live in
fear everyday because of unpaid payday loans. The reason why is payday
lenders sometimes threaten customers to pay back their payday loan debt within
a short deadline or they could face serious consequences if they do not come up
with the money on time.
We have heard several threats and here are some of the most commonly used ones:
We have heard several threats and here are some of the most commonly used ones:
1.
We will sue you for check fraud.
2.
We will have someone arrest you.
3.
We will make sure you go to jail.
Are these true? Can a payday
lender really sue, arrest, or put you in jail for a payday loan? The
answer is no. Defaulting on a payday loan is not a crime and cannot
result in criminal charges. This means that you cannot be prosecuted,
arrested, or put in jail check fraud, breach of contract, or anything else that
your payday lender might threaten you with.
Making false threats to collect on a
debt is illegal in every state. If your payday lender has threatened you
with the statements above, or something similar, it is likely that your payday
lender is conducting business illegally and is unlicensed. This is
usually the case if you received your payday loan from a company online.
90% of internet payday lenders are unlicensed, which means that they do
not have the legal ability to take civil action against you. For this
reason, they threaten customers into paying them because they know that if they
are not successful on collecting the debt themselves, then there is no other
way for them to get their money back. They also cannot take you to court
if you live in a state where payday lending is prohibited. The
states in which payday lending is not allowed are:
- Connecticut
- Georgia
- Maine
- Maryland
- Massachusetts
- New Jersey
- New York
- North Carolina
- Pennsylvania
- Vermont
- Washington DC
- West Virginia
Storefront payday lenders are a
different case. Storefront payday lenders are legal and licensed, which
means that they can file a civil lawsuit against you.
The purpose of a civil lawsuit is to
simply obtain a judgment for a wage garnishment so that they can be repaid.
To avoid civil action, you need to
keep communication lines open between you and your licensed payday lender.
Taking you to small claims court for a payday loan is the last thing that
your payday lenders want to do. Suing you will take a lot of paperwork,
money, and time out of your payday lender. The only reason your payday
lender will resort to civil action is if they are hopeless about getting their
money back. The best thing for you to do is to talk to them about your
situation and try to work out an arrangement that you can both agree on so that
you can both avoid the legal battle.
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