Payday Loan

What is the name of your state? TX
My husband and my self took out a payday loan over the internet last summer and we have defaulted on it because we moved and changed banks we went thru all of the proper procedures and let the loan company know where we were moving to and so forth sine the loan wasi n my name the collections agency that's handeling this matter has just know started calling harassing me on my job and threatening an arrest warrent if we do not come up with the sum of $ 1.235.00 and that was on a $ 500.00 loan... what I told them was I would pay it little by little until it was payed off but nooooooo the lady said we either pay it all with in 24 hours or go to jail I figure it was only a scare tactic but can collection agencies do tat type of harrassment ??????????

Payday loan types are especially nasty.

The Fair Debt Collection Practices Act governs behavior of collection agencies.

But, the original creditor is not subject to the FDCPA.

If you are being called by the payday loan company, your options are very limited. If you are being called by a collection agency, then you have more "rights".

Regardless who is calling, if you are in default then they have the right to demand payment in full immediately. They are not required to accept any payment plan, especially one that provides for small payments over time.

It is very unlikely you can be arrested. In some states writing a hot check is a criminal act. Almost always a payday loan is viewed as a loan instead of a hot check. I think you are OK in TX.

In almost all cases, threating to have you arrested is illegal. But, the problem is "what are you going to do?". You can't call the cops because this is purely a civil matter. You would have to file a lawsuit against the creditor/collector. Even then it becomes a case of your word against their word. The judge is not going to know who is telling the truth.

Your wages in TX cannot be garnished. They can sue you and obtain a judgment. They can use the judgment to levy your bank account. Judgments hang around a really long time.

I suggest you do not get into a verbal debate with these people. Collection is an exercise in psychology. I recommend you write a letter to the creditor/collector and tell them your employer does not allow personal phone calls -- send the letter certified mail return receipt requested -- that will stop the calls at work if the calls are coming from a collection agency. If the calls are from the original creditor, nothing will change. In that case, I would just hang up.

You need to develop a strategy for taking care of this. It will get more and more nasty and more and more expensive as time goes on.

Thank you so much for your help that answered alot of questions that had crossed my mind when the agency called us.I think it had me more worried than my husband **************. But again thank you

I think this link would be very helpful to you. Creditors are not afraid to break the law and bully you, but you can alweays be ready for them. Take care!

http://www.fair-debt-collection.com/index.html

Also, payday loans are meant to take advantage of people... not to help you out. IF they really wanted to help, they would not have 700%APR or better on their loans. Point made... stay away from these "loans" as it could easily force you into bankruptcy.

Another piece of advice, if you file BK on payday loans, you must not tell them until the papers are filed - some will take legal action in the form of a suit, and in that case, and that debt would not be discharged. This may not apply to you, but I figured i would throw it out there.

Good luck!

thank you for the information it was most helpful

I'm not clear from your post, because you say you "moved", did/does everything take place in Texas?

If so, in Texas, payday loans are regulated under Texas Admin. Code sect 1.605 et seq. and payday lenders, like other Texas lenders, must be licensed under Texas Fin. Code Ann. sect. 342. Payday lenders are prohibited from pursuing criminal charges to collect on the debt. Moreover, in addition to the FDCPA, Texas state law (Texas Debt Collection Act) prohibits a collection agency from expressly threatening arrest.

A required disclosure with your payday loan involves certain advisory warnings AND the name and address of the Office of the Consumer Credit Commissioner, along with a consumer help line telephone number. One suggestion would be to call the help line. Another would be to write to the Commissioner about the threats of prosecution and copy the CA.

Finally,the TDCA is administered by the Attorney General, and there is a private right of action for provable violations. Proof may be hard to come by, but I would expect that also writing to the AG and copying the CA would have an affect on those calls. Simply remember that, so long as the debt is outstanding, you're still vulnerable to civil action.

Thank you for your imput it is most helpful and yes everything did take place in texas