Can I Get Arrested for Not Paying a Payday Loan?

People take out payday loans because they’re in a bad financial situation.  Sometimes, your financial situation gets better and you just pay off what you owe to the payday loan company.  And sometimes, the financial situation never gets any better.

Many people come to me because they couldn’t afford to make the payments on those payday loans.  That’s not surprising, since the interest on those loans averages between 380% and 410% (at least on the ones I see here in my Dallas offices).  Here’s a typical question I get from people who come in for a free consultation with me:

I got a very rude and angry call from a debt collector who handles collections for one of the payday loan companies that I have money from. He told me that CRIMINAL CHARGES would be brought against me because the check I gave them bounced and that it was a “theft by check” which they said is a FELONY. They also said that the contract I signed says I’m not allowed to file for bankruptcy and I will get in trouble if I try to file a bankruptcy case. Can I get arrested for not paying this payday loan?

The specific situation described usually will not qualify for the Texas theft by check statute because the payday lender will have taken a postdated check. Since the check is postdated, it cannot satisfy the statute’s requirement that you “represented” to the payday lender that the funds were actually in the account on the date it was issued.

The payday loan companies say these things all the time– scaring you is the only leverage they have to get you to pay them. I hear this same story from my bankruptcy clients almost every day. Many of them have several payday loans and are using the new ones they take out to pay off the older ones.

If you file a bankruptcy– either chapter 7 or chapter 13– the whole problem goes away. In fact, most all your debts will go away.


When you’re ready to get out from under the crushing debt load and begin a new debt-free life, contact Dallas bankruptcy lawyer Rustin Polk by clicking here. Tell our Appointments Coordinator, Kimberly, that you are a website reader and she will set you up with a free, no obligation appointment to learn how we can help you get out of debt.

13 Responses to Can I Get Arrested for Not Paying a Payday Loan?

  1. Marlene Tynon says:

    I have this person calling me that said i owed $1800 for a payday loan that i do not remember getting,I called him back to set up pmt.arrangements and then he said i owed $3000.This was in the matter of 2 days the amt.went up $1200.He could hardly speak any english and what is a DV letter.

  2. Duston80 says:

    Excellent write-up although the loan companies neglect to talk about the bad parts of the whole deal upfront and prevent the situation from happening in the first place.

  3. Observed says:

    The Texas Attorney General had to sue some payday loan companies for sending letters saying that criminal charges were forthcoming, when no such criminal charges had been filed. Tons of payday loan companies do this, I guess they feel like being evil liars is the only leverage they have.

    https://www.oag.state.tx.us/newspubs/releases/2010/102910cashmax_pop.pdf

    https://www.oag.state.tx.us/newspubs/releases/2010/102910cashmax_sample.pdf

  4. Latonya Hearn says:

    WARNING!!! If someone representing a payday loan company says you have criminal charges,etc. It is probably a scam. I learned the hard way, after receiving a call about criminal charges,etc about a payday loan I didn’t remember. At first, I was so scared having never been in trouble. So I did send a total of $600 trying to take care of a 1200 balance. The receipt that I begged for was my first sign that something was wrong. It looked fake not from any business I’ve ever seen. Second, they couldn’t tell me any of my original debt account number or phone number. The company name they said I owed didn’t even exist! Fast forward till now. Since they have fooled me before now they won’t stop! They still call from time to time trying to scheme me again! Our government needs to do something about these folks!

    • danielle says:

      that is happening to me right now. they are saying im goin to be arrested and stuff. for a loan that was back 6yrs ago. they call me every 15mins day and night. they can’t speak that good of english. they have scared that the cops are coming to my home and i don’t know what to do.

      • Rustin Polk says:

        Danielle, I am sorry to hear that they are harassing you over this.

        The fact of the matter is that scaring you completely to death is the only leverage they have over you. So, they’ll say whatever they can think of to scare you.

        Are the police standing outside your door waiting to arrest you just because the Payday Loan place said the debt hasn’t been paid yet? No, the police aren’t standing there waiting although the Payday Loan place sure would love for you to actually believe that.

        When they say those type of things, it’s just their way of jerking your chain.

        — Rustin

  5. Jason says:

    I took out a payday loan from a company and got upside down on it. I started to get calls threatening me with criminal charges. When I finally decided to answer the phone I asked what was the name of the company that I took out the loan with and it was no where near the right name. I told the guy to stop calling but he never did. He even told me one time that he was sending a cop right away and my response was that I was at home waiting. Needless to say I started to tell them they had the wrong number but once in a while they sneak in a call hoping to catch me. Maybe some day it will stop.

  6. Kora says:

    I have 3 pady loans and 1 instalment loan I am unable to pay them any more Ihave them since 10/2011 debting my account every 2 weeks up until today because I cant pay them off they have actully taken more out in fees now then I owed but because I cant pay the full amount they keep takening out money the fees have doubled what I barrrowed from them now Im behind in other bills like rent, water lights, ect..

    • Rustin Polk says:

      Hi Kora–

      Even when you’ve kept up with all the payments on payday loans, it’s still extremely difficult to get them completely paid off. The interest rates I usually see for my Texas clients vary around 300% – 400%.

      When we get rid of the payday loans in a Chapter 7 though, it frees up enough money in your budget so that paying rent, water, and electric bills is no longer a problem.

      — Rustin

  7. Rick, El Paso says:

    What will the payday loan company do if I do not pay but they have my personal check? I want to work with them,but I do not want to be served with a lawsuit like they are threatening me with. I have NO assets. I have more than 1 payday loan. Is it also true that if I send each of them 5.00 per month, it shows good faith on my part and there is nothing they can do as long as I am paying “something”?

    • Rustin Polk says:

      No, sending them $5 a month doesn’t prove “good faith” on your part if/when you get to court. As well, “good faith” is not not something the civil court takes into consideration at that point. The lawsuit is only about do you owe it or do you not owe it.

      I can think of two things that will be accomplished by you sending $5 every month and neither of them are good. First, they can argue that the statute of limitations has not started running out and they’re able to still sue you long after that time window normally would have closed on them. Second, they’ll always know where you bank and where to find you, in order to get you served with a lawsuit or to garnish your account.

      Defaulting on the loans is painful but it provides a clean break. Then you can go back and try to negotiate with them and see if they will make a written agreement to put you on a monthly payment arrangement.

      Or just file a bankruptcy and discharge it all so you don’t have to spend so much time messing with it.

  8. reed b says:

    ive had this happen to me twice in my years. i wasnt able to pay it back. i started and got behing. the only thing happened on my internet loan was it was sent to collections. locally, a judgement was recieved but they gave me 15 days to pay it and keep it off my credit report. i actually paid it the day before court but the plantiff didnt check with the office the evening before court. i called her and she verified everything and sent a notorized letter to reconciliation court and it was deemed paid.

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