I took out a payday loan about 4 years ago, went through some bad times and forgot about it. Recently a collection agency called my uncle and his mother in law looking for me. I contacted the agency and they said I had to pay by credit card or they would take me to court, I do not have a credit card and have never recieved a written notice. With my moms permission I gave them her credit number, but now stopped payment until I find out if what Im doing is right. I want to pay this bakc but I can only make small payments using a money order. Is this legal?? Can I really go to jail??
I am not licensed in Wisconsin and can only provide general advicem as I do assist clients with debt resolution in the states where I am admitted to practice You should discuss the specifics of your state law with a lawyer who specializaes in debt resolution in your state.
I know it will not help you now, but payday loans are a bad thing in general. They are to bae avoided at all costs.
However, you have one. In some states this is just an idle threat as payday loans are illegal. I suggest that you contact the Wisconsin attorney general's office to see if that is the case in your state as you may not have to pay this debt if its illegal.
Assuming that it is legal, the statute of limitations may have expired in your state. The statute of limitations runs generally from the date of last payment. Expiration of the statue does not mean that you don't owe the debt. It means that the debt is no longer legally collectible in a court of law. The statute is a defense that must be raised in an answer to a complaint.
You cannot go to jail for not paying a debt. However, some debt collectors resort to dirty tricks. In other instances where a state has wage garnishment, a creditor who obtains a judgment can summon a debtor into court. If the debtor ignores the summons, then an arrest warrant may be issued and a debtor can be brought in before the court. However, this is only in cases where a cr3editor first obtains a judgment against you.
A debt collector cannot force you to pay a debt. Nor can they force you to pay by a credit card.
Since you indicate that you have never received written notice, you need to get the name and address of the debt collector. Once you have that, you need to write the debt collector a letter. You need to dispute the debt and ask for written proof. You also need to tell the debt collector that they are not to contact your parents or you at work and that all further contact is to be in writing and sent to you at your home address. Provide the home address. Tell them that any discussion of payment is premature until you review the validation.
Then wait and see if you get validation. In the meantime, check with your state attorney general and/or an attorney to find out if payday loans are legal in your state, the statute of limitations and the ramifications of any lawsuit.
If the loans are legal and you can be sued, start saving up your funds now. Depending on how much is owed, you can always offer to settle the debt. Most creditors want paid and will accept. Before you pay, get a written settlement letter outlining the terms of any settlement. Do not pay until you have the funds and the collection agency agrees to settle. And payment by money order is perfectly acceptable. Make a copy of the money order before you send it and keep the settlement letter and copy of the money order forever to prove that you paid the debt.
1 lawyer agrees
Divorce / Separation Lawyer
I agree with the other attorney in most aspects. Yes, these loans are legal in WI. The statute of limitations is six years. Always have them validate the debt and get all payment terms in writing.
In accordance with the Avvo community guidelines, this communication does not constitute "legal advice", nor does it form an attorney-client relationship. You should seek counsel in your geographic area regarding any specific questions.