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Can I Be Arrested For Default On Payday Loans [Fact vs Fiction]
November 7, 2008, 12:06:21
There are tons of questions that might rise to your mind if you suddenly find that you cannot repay your payday loan. One of the most common questions that tends to arise is the question of can you be arrested for default on payday loans. While many people seem to worry that this is a huge concern it is comforting to take note that you cannot be arrested for this. The argument that many lenders offer in that you are breaking the law if you do not repay the money and to some consumers this sounds like a reasonable argument.
It is very important that you realize a payday loan is just that, a loan. You are not arrested for going to a bank and borrowing money and then defaulting either. That is the same principal. If you default on a payday loan of course, the lender is going to be upset, and they are also likely to send the account off for collections, which can significantly increase the amount of money that you owe in order to get the debt repaid, but they cannot have you put into jail.
There are ways that you can be arrested though. Typically speaking all lenders are protected against fraud, this would include using someone else’s identity to obtain a loan. In the case of a payday loan it would also involve using someone else’s bank account that you are not legally entitled to use. Knowing that you are using someone else’s account means that you are committing a crime and this is a circumstance where you can be arrested. To avoid this problem you should simply provide correct information about your identity, as well as only use accounts that you are legally permitted to use for payday loans.
As long as you are following the law and not providing inaccurate information to the lenders, you are protected against being arrested. Much as a collection agency is not permitted to threaten you with jail time for a debt that you owe, payday loan companies are also not permitted to use these threats. It is important that you know what your rights are, as well as your responsibilities to ensure that you are treated fairly. Many consumers find themselves victims of abusive practices if they are unaware of their rights and this is a terrible position to be in. You must take the time to properly educate yourself in order to actually prevent companies from abusing you.
Of course, it is always best to simply repay the loan when the money is due. Life happens though, and frequently plans can change, often at the very last second, which make it quite difficult to follow through with plans that you have. If you discover that you are not able to repay your loan it is always best to contact your payday lender, however there is no reason to ever be concerned that you can be arrested for a default on a payday loan. You should take comfort in knowing that you are not able to be arrested, but you should still attempt to repay the debt as quickly as possible to keep from having to deal with the stress that a defaulted loan can cause.
Explore Other Legal News Articles:
Finding Payday Loan Laws
Dealing With Collection Companies
Default on Payday Loan
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