I am getting harrasing calls early in the morning saying the unpaid loan is now consdidered "check fraud" I was making payments on the loan but due to a divorce and health matters i was not able to pay the loan off. The checking account was closed 2009. They say it will become a warrant for my arrest in Santa Clara county.
No. They can sue you, but can't send you to jail. You need to write down who you are talking to and take detailed notes. I would recommend you seek a lawyer familiar with FDCPA (Fair Debt Consumer Protection Act) violations in your area.
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Post-dated checks are always considered loans, and can not be prosecuted under bad check laws in California.
The collection agency is in violation of state and Federal law. Document the communications, save voice mails, and contact an attorney.
Unfortunately, debt collectors say things like this all the time even though this is false and illegal. They continue to do this not only because most debt collectors aren't educated or ethical, but because there is seldom any negative repercussion to them doing this. In fact, it is a tactic that often works to pay their mortgage & put food on their tables, just as any other criminal enterprise must do.
As long as no one speaks up to the authorities, these slimebags will continue to victimize the public. Contact the state agency that regulates debt collectors with specific information about this call and consider hiring an attorney to sue them for violating your rights. You will be making the world a better place for everyone by doing this.
Hope this perspective helps!