What to do if I took out a payday loan 9 years ago that I did not repay and now I’m being threatened with criminal action?

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What to do if I took out a payday loan 9 years ago that I did not repay and now I’m being threatened with criminal action?

I did not repay all of the loan. The account went to collections and has been resold and resold again to a third party. Now, the third party is trying to collect and has threatened criminal action.

Asked on January 15, 2013 under Bankruptcy Law, South Carolina

Answers:

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

Answered 8 years ago | Contributor

Unless you committed fraud (ie you never had any intention of paying the money back), threats of criminal action are just that, threats. The fact is that a person cannot be arrested for failure to pay on a debt; it is against the law for a creditor to threaten criminal action for non-payment.

You should also know that if the company calling you is a "third party collector" (which you indicate that it is), then it may not call you at work once you have informed it that your employer does not allow these type of calls. Additionally, you can also tell it not to call you at all (including at home). In fact you should tell it this by letter as well. Pursuant to the Fair Debt Collection Practices Act (FDCPA), if it continues to harass you by phone, you can bring a legal action against them.

Note: If the original debtor is calling you then the FDCPA does not apply. However, even if it is the original creditor, there may be some specific state law protection for you on this.


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