Defaulting on a Payday Loan- Can I Be Arrested?
Many people wonder if they can be arrested for defaulting on a payday cash advance loan. Although this is not a good predicament in which to find oneself, the good news is: No, one cannot be arrested in the case of a payday loan default. As a matter of fact, under the Fair Debt Collections Practices Act (FDCPA), it is absolutely illegal for any lending institution to threaten a borrower with the prospect of being arrested for non-payment of any kind of debt. No matter how many threats you receive for not repaying a loan, it cannot happen, as there is no law allowing one to be arrested for not repaying payday loan debt. As a result, you have no reason to worry about being arrested if you find yourself defaulting on a payday loan or cash advance.
So What Is There to Worry about?
Even though you cannot be arrested for defaulting on a cash advance loan, there are other matters of which to be concerned. These worries may not quite compare to facing a prison sentence, but nevertheless, they are not situations in which anyone wants to find themselves. For starters, non-payment of debt will result in the skyrocketing of penalties and fees. The more you delay in repaying the loan, the more these fees and interest will accrue. In time, this will undoubtedly make repaying the loan that much more difficult.
Aside from fees, penalties, and interest piling up, delaying the repayment of an advance loan will steadily have a negative impact on your credit score. The longer you allow payday loan debt to accrue, the more and more your credit score will plummet. Your credit rating will be even more negatively affected the larger the loan is. Therefore, anyone taking out a large payday loan and then delaying its repayment can expect their credit rating to look horrible within a matter of months.
To avoid any of these situations, it is very important for you to think very carefully about whether or not taking out a payday loan is right for you, and if so, if you will be able to repay the debt by the next paycheck period.