Have you taken out a payday loan?
If yes, you might be worried about repaying your payday loans or pdls in short. Perhaps, one of the reasons is the incessantly high-interest rate of payday loans!Many people opt for pdls when they need urgent money because of faster cash disbursement. Besides, the eligibility criteria for taking out a payday loan is quite simpler than taking out a personal installment loan .
Due to the requirement of fast cash, most people don’t think about the consequences. And thereby, they fall prey to the debt trap!
At this moment, you might wonder what will happen if you don’t pay off your pdl? Well, your lender may threaten you to have you arrested or garnish your wages ! But trust me, buddy, nothing like that is gonna happen!
But, if you are sued or a court judgment is against you, the judge can issue a warrant for your arrest!
That’s why I always suggest everyone not to ignore court orders to appear! And make sure to check the validation of the debt before proceeding.
At times, it might happen that a payday loan has crossed the statute of limitations (SOL). But you have received collection calls regarding your payday loans! One of the best ways to deal with payday loan debt collection is to know about the statute of limitations on a pdl in your state!
Now, you may ask me, what is the statute of limitations?
Well, it defines the time till which a payday lender can file a lawsuit against you to collect an unpaid debt!
The statute of limitations on a payday loan will vary depending on the state you reside in. Besides, each state has its own SOL for different types of loans like oral agreements, written contracts, promissory notes, etc.
So, when does the statute of limitations begin on payday loan debt?
Usually, payday loans come under the debts resulting from written contracts! In most cases, the SOL for a written contract ranges from about 3 to 6 years. But in some states like Kentucky, Louisiana, it goes as high as 10 years !!
For example, the SOL on pdls in Florida is 5 years; while in Kentucky, the SOL on pdls is 6 years!
So, before you respond to a payday loan collection, find out the statute of limitations of your state and act accordingly! You can contact the attorney general’s office in your state to gather information. Else, you can reach out to legal aid to know about the statute of limitations on pdls in your state!
Always remember, you are not bound to pay off a debt if it has passed the statute of limitations. A creditor can’t sue you if you don’t pay off that particular debt.
But what if a lender still sues you after the statute of limitations expires?
Firstly, it is against the law if debt collectors sue you or threaten to sue you for a time-barred debt!
In that case, you should go to the court, and ask the judge to adjourn the case as the debt is time-barred (according to your state’s SOL). If needed, you can contact an attorney to help you with the entire process!
But as I said earlier, don’t ignore court summons ever! Doing so, a judgment can go against you. And the lender or collector can win a judgment for your wage garnishment!
However, if you are dealing with illegal payday loans , no need to worry! The lenders might even threaten you to sue you with dire consequences. But the truth is, illegal payday lenders can’t file a lawsuit against you. Just pay off the principal amount and talk to your lender to close the account!
The bottom line is, I would advise you to stay away from payday loans as much as possible! But if you have already taken out a pdl, you should keep the records of the same. So, if you have to face a lawsuit ever, these documents can be in your defense!