If I took out a payday loan but lost my job and can’t pay, can they arrest me?

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If I took out a payday loan but lost my job and can’t pay, can they arrest me?

I want to pay it off. They are trying to arrest me but I want to set up a payment plan until I can pay it off completely without going to jail. I am pregnant. I have no criminal record at all and don’t want one. I just want to solve this.

Asked on August 20, 2011 Michigan

Answers:

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

Answered 10 years ago | Contributor

No, you cannot be you cannot be arrested for non-payment of a loan.  People are not imprisoned due to debt. Defaulting on a loanis a civil not criminal matter. The exception to this would be if a fraud was committed in obtaining the money.  For example, it would be a crime if you borrowed money with no intention of paying it back. Other than that, neither a debt collector or creditor may threaten you with criminal charges.  In fact if they do you could sue them. Under federal law (the "Fair Debt Collections Practices Act") a creditor.debt collector cannot harass or intimidate you. Further, certain state laws also offer a debtor additional protection.

However that you still owe the money. Therfore you are correct, you need to make re-payment arrangements. Once they know that you know your legal rights they will probably be agreeable to working an arrangement out with you.


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