Bruce McClary of the National Foundation for Credit Counselling said that the unpaid loan could lead to fines, increases of the current interest rate, complaints from the creditor and filing the complaint in court. You think that all this may not happen, because you took only $300, but you are wrong.
There are consequences that can arise from non-payment of a payday loan:
First of all: they call and check your bank account
Lenders do not lose time; they start acting if you did not pay the loan in time. The first action is to look at your personal account that you specified for automatic payments from your salary. They can use such system to take money; the amount could close your loan. If this account is not available or you did not enter it, then the lender will call you and remind you about the payment.
There is a federal law where creditors cannot disclose your personal and loan information to anyone. But credit companies do not adhere to this law law and lenders frequently collaborate with debt collection agencies that can call your friends and relatives to find you. They are quite well-aware that in 87% of loan non-payment a person will not pay it at all, and they will lose money. So, they can be pretty aggressive.
Court and prison are a threat
Yes, this threat has foundations, but it is not legal. If a person cannot repay a loan, he does not violate the criminal law. The creditor does not have the right to threaten a person with arrest and imprisonment. If this happens, you can file a retaliatory complaint against the creditor to the state attorney general’s office. But no one will do this, because a person is afraid of a response complaint for loan non-payment. This is not a crime, but it is your contravention.
You will be forced to make payment
There is another way — the creditor applies to a collection agency. Real professionals who know their business work there. A lender company pays a percentage to the agency and they start looking for you. These guys can call you 10 times a day, send threats and do everything to encourage you to make payment for your loan.
Other action: the courthouse
If you think that your loan amount is small and the collection agency will not sue to the court, then you are wrong. Many lawsuits against consumers consist of 300-500 dollars of loan non-payment. In such cases, the creditor wins, because the client must appear in the courthouse. The court will appoint a mandatory payment, but may take into account the difficult financial situation and divide the total amount into several parts.
Do not let panic drive you
If you do not know how to repay the loan and you have financial difficulties, then you can contact the legal aid center. A specialist will help you to make a plan or strategy and you can find a solution to repay the loan. It is better not to hide from the creditor — explain the problem in order to find the way together.
You should not ignore a lawsuit
If you have not found a solution and can’t deal with the lender, find out what to do with the lawsuit. Talk to the judge and tell about your problem, they can help you find the right way.