Summary: Are you being sued for a payday loan? Is the lender threatening you with jailtime? Find out if you can go to jail for a payday loan.
Did you know about 12 million Americans use payday loans annually? This comes as no surprise, given that payday loans help fulfill the financial needs of many working Americans who can’t access traditional loans.
Payday loans may seem convenient and offer a short-term solution when you need immediate cash to cover an emergency. However, these loans attract high-interest rates and fees. This is the most common reason most people default on payday loans.
If you’ve defaulted on your payday loan, you might be concerned about the consequences of doing so. Some people might even be worried about the possibility of going to jail for not paying their payday loans.
According to CNBC, there have been reports of individuals getting arrested for falling behind on their payday loans. However, this shouldn’t be a cause for alarm because, legally, debtors can’t be jailed for not paying a debt. In some states, it’s even illegal for a creditor to threaten a borrower with jail.
Most of the time, when you default on a payday loan, debt collectors begin calling you day and night. Some even threaten to have you arrested. This can be quite stressful, especially if you want to pay the debt but can’t due to financial hardship.
But there’s no reason to worry; the Fair Debt Collection Practices Act protects you by prohibiting debt collectors from harassing you, issuing threats, or calling you after 9 p.m. If a debt collector constantly harasses you and threatens to have you arrested, you can take the following actions:
File a complaint with your state’s attorney general. To find out who your state’s attorney general is, click on this site and select your state. File a formal complaint with your state’s consumer protection office. To find your state’s consumer protection office contacts, click on this site and select your state.
Submit a formal complaint to the Consumer Financial Protection Bureau (CFPB). You can do this by submitting your complaint on their official website or by calling 855-411-2372.
Can a payday lender sue you?
Many individuals who’ve defaulted on their payday loans are particularly terrified of a lawsuit. Understandably, the courtroom is the last place they want to be for defaulting on a loan.
Can You Go to Jail for a Payday Loan?
Payday lenders are good at making all sorts of threats, but can they sue you? Well, the answer to this is yes. A payday lender can take you to court for defaulting on a loan and if you violate the terms of your loan agreement.
However, they can only take you to a civil court and not a criminal court. So most of the time, a payday lender would threaten to sue, but they actually can’t do so. Here’s why.
First of all, going to court is expensive considering the legal fees involved. Secondly, most lenders would prefer to negotiate with you and come up with an out-of-court agreement rather than take you to court. If a payday lender takes you to court, they’re banking on the assumption that you won’t respond to the court summons, forcing the court to rule in their favor. In such a case, the judge may order a wage garnishment.
To prevent this from happening, you can use SoloSuit to file an attorney-approved answer. This software automatically generates an answer document for you payday loans Ohio based on the information you provide. An attorney from SoloSuit then reviews the answer, ensuring it meets all the requirements for your case, and then sends a copy to the court and the plaintiff.