Imagine your car broke down, and you needed to borrow $200 from a payday lender to get it fixed. You thought you would be able to pay the loan off in time, but your landlord raises your rent. You now have no idea how you can pay it off at all, let alone on time.
You might think, “It’s just $200. Are they going to bother coming after me for such a small amount?”
While $200 may not seem like a lot of money for a lender, you may be surprised by the lengths many payday lenders are willing to go to collect.
To put some perspective on this, consider the fact that stealing $400 or an item valued at that amount is deemed to be grand theft.
So $200 is not considered a trivial amount of money. Nor is $100, or any other amount. Payday lenders are in the business of making small loans. If they allowed their customers to walk away without paying, all of those small loans would add up fast.
No. But there is a chance that the lender will take you to court. To do this, they will search for a loophole through which they can claim you have committed a criminal act.
If this happens to you, you must show up. You should also immediately get in touch with your attorney general to seek advice.
Failure to appear in court means that you lose the case automatically. At that point, the court itself will come after you for the money. The court may try to take the money right out of your bank account. If that does not work, they may garnish your wages or put a lien against your property.
This is why it is vital to do your best to pay your loan back on time and in full. If you cannot, talk to a credit counselor or a legal aid attorney for advice on your options.
Reviewed by: Casey Bond
Date Reviewed: Mar 22, 2019