Can criminal charges be filed against me for a defaulted payday loan?

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Can criminal charges be filed against me for a defaulted payday loan?

I took out a payday loan 7 years ago. Every week for 1 year straight I made payments. Today I got a call from a collection agency threatening that they were going to file criminal charges against me for not paying it off. Can they file criminal charges against me? What can they do to me legally?

Asked on August 10, 2011 California

Answers:

M.D., Member, California and New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

First of all, you cannot be threatened with arrest for non-payment of a loan.  In this day and age people no longer go to jail for owing money; debtor's prison is a thing of the past.  Owing a debt is a civil not criminal matter. The exception to this would be if fraud was committed in obtaining the money.  So, for example, if you borrowed money with no intention of paying it back. That would be a crime. Absent that, neither a debt collector or creditor may threaten you with filing criminal charges.  If they do you could actually bring suit against them.  Further, they cannot harass or intimidate you. It's the law and it's called the "Fair Debt Collections Practices Act" (FDCPA).  Certain state laws may also apply.

The fact is however that you still owe the money. So try to make re-payment arrangements. Once they know that you know your rights they will probably be agreeable.


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