Can I be arrested for not paying a loan?

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Can I be arrested for not paying a loan?

I got a call yesterday that I owed an online loan; they said I owed $787.23 from a year ago. I called my bank and checked to see if I had a deposit that fit the amount. They said that I took out $300. I had taken out 2 other loans from 2 different companies. However, I called and they were paid in full. The person on the phone told me that I would be arrested if I didn’t pay him at that time. Is this true?

Asked on February 16, 2014 under Criminal Law, North Carolina


Brook Miscoski / Hurr Law Office PC

Answered 10 years ago | Contributor

From your question, I believe that you have taken out payday loans. You gave a check as security, and intended to pay in full, and proceeded to make payments. Right now there's a disagreement about whether you paid in full.

Debtor's prison has been outlawed throughout the U.S. for a very long time. When a creditor threatens to have you thrown in jail for failure to pay a debt, that threat SHOULD BE illegal and SHOULD BE punished by law as a serious offense against debtor's rights.

However, what's happening here is that usually a payday loan borrower leaves a check as security with the lender. Later on, if the borrower can't pay, the lender claims that there has been check fraud, which is a criminal offense. The lender files complaints based on check fraud to pressure the borrower, and makes threatening phone calls.

Whether this works in your local area is a matter of how the prosecutor sees the whole mess. In Texas, some prosecuters are smart enough to see through what is obviously a scam (treating debtors like they somehow committed check fraud in order to get the loan), but it's a difficult task for state enforcement to keep up with. I don't know what it's like in your state, but in Texas we know what's going on but it's still hard to keep up with.

So is it legitimate to put you in jail over this? No.

Is the situation new and complicated enough that you should take steps to legally protect yourself? Yes.

Additionally, Texas has a Consumer Credit Commission where a debtor can report this sort of unconscionable mafioso b.s. You should find out how to make a complaint in your state, and do it.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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