Are you getting sleepless nights thinking of “Can I be arrested for default on payday loan?” You’ll be happy to know that the answer is ‘No’. Your payday loan lenders cannot threaten you with the possibility of arrest or imprisonment even if you’ve defaulted on multiple payday loans. However, you can be sued for defaulting on payday loans.

How are you protected by law?

As per FDCPA (Fair Debt collection Practices Act), the debt collectors cannot use abusive, unfair means or deceptive practices to collect debt from a borrower. FDCPA also prohibits debt collectors from saying that you’ll be arrested if you’re not able to pay off your dues.

If a lender or a collection agency threatens you with arrest for defaulting on a payday loan, then you have every right to sue the collector or lender in a federal or a state court within one year from the day the FDCPA has been violated.

What happens if you default on payday loans?

Go through this section to know about the consequences of defaulting on payday loans.

• May have to pay high interest – Usually, you need to pay high interest rate when you’re unable to repay a payday loan within the loan term, which is usually your next payday. The longer it takes to pay off a payday loan, the more interest and fees will get accumulated. So, with time, it may become more difficult to pay off the outstanding dues on your payday loans.

• Lawsuit may be filed against you – When you default on a payday loan, the lender can file a lawsuit in order to obtain a judgment against you for the outstanding debt amount. The judgment can be enforced by wage garnishment or with the help of other methods, such as, placing a lien on real property.

Your credit score may also get affected when you default on payday loans. So, instead of taking out payday loans, you can obtain personal loans to overcome emergency situations. Usually, the terms and conditions on a personal loan are much better than that of a payday loan.

How can you repay your multiple payday loans?

Instead of pondering over “Can I be arrested for default on payday loan?” you can take help of a payday loan consolidation program to consolidate and repay your multiple loans in a systematic way. When you enroll in such a program, the company negotiates with your lenders to reduce the loan interest rates so that it becomes easier for you to repay your payday loans. The company also makes a monthly repayment plan with which you can pay back your multiple loans/debts with the help of a single monthly payment. Your late fees may also get waived off when you go for payday loan consolidation.

However, before enrolling in such a service, you should enquire how much you need to pay for the professional help. It is advisable that you take help of a reputed company to repay your payday loan debts.

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