Can I be Arrested for Default on Payday Loan?
Can I be arrested for default on payday loan?
The answer is 100% negative! No, you cannot be arrested for default on payday loan. The reason is there is no such rule that permits you to get arrested just because you do not pay off payday loan debt. So, you cannot be arrested or even jailed for default on payday loan.
According to the Fair Debt Collections Practices Act (FDCPA), it is illegal for a payday loan company or any business institution to threaten a person with the possibility of being arrested for non payment of any debt. Even if the company or the collection agency threat you for being arrested or charged with a crime, do not worry, this will never happen.
The payday loan company still can take some actions as any other unsecured creditor to enforce an unpaid debt. Typically, these actions will start with telephone calls or notification letters that demands you to pay your debt. However, you can stop this action by sending a cease communication demand letter called Ceased and Desist Notice to the collection agency. The FDCPA also states that the payday loan company or the collection agency has to stop calling you if you ask both to do so via Ceased and Desist Notice.
If the payday loan company or the agency collector cannot force you to pay the debt by applying the standard practice, for example, threatening telephone calls, they may decide to file a compliant against you for a trial against you for the remaining debt. If they still continue and get a ruling against you, then they can take the necessary steps to implement the ruling, as allowed by your state of law.
The most common strategy of enforcing a ruling by garnishment of wages, bank account levies, privileges and property. To learn what action the creditor can take to enforce a ruling in your state, I suggest your to visit BCS Alliance website at www.bcsalliance.com.
Fortunately, most creditors seldom sue the debtors to keep collecting the debts, a trial is the worst case, but you likely will not experience. If the lender does not take such extreme actions, you should think about consulting a qualified bankruptcy lawyer to find out the solutions that are available for you.
You may be fortunate with regard to your being not able to repay the loans. I found eight states of which the regulations of payday loan rules ask the lenders to set up an installment repayment plan if an account achieves the highest number of roll overs permitted by law and the debtor states that borrower is not able to pay the balance due. For more information please, check the Payday Loan Information Consumer Federation of America at http://www.paydayloaninfo.org where you can read about all these loans and various efforts to control them.
If you are not in one of these states, you probably want to think about making payments to the payday loan company of what you can afford to pay over time. In most states, the limit will soon be turning achieved, and the interest rate the lender can charge will be affected by state law. If the lender does not receive the payments, simply put the amount you are able to pay aside each month until you have sufficient money to pay either the loan or offering a settlement. Learn more about the rules in your state to get the best strategy for your condition.
To summarize, can I be arrested for default on payday loan? The answer is simply no, period. You cannot be arrested for not paying a payday loan debt. There are two things as the consequences though. As the time goes by, your debt amount will increase because of the interest rates and penalties. The second is, your credit score, which will start declining steadily as the debt loan remains unpaid. The bigger your loan and the longer the debt remains unpaid, the more difficult the hit will be to your credit rating. If the cycle goes on like this and you are continually not prompt with your payments (or if you do not pay them at all), your credit score will be likely in the toilet within just a few months time.
I do hope one of the approaches I have described above will assist you to solve the payday loan problem.
Source: http://www.answer5wh.com
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