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Can I be criminally prosecuted for defaulting on a payday loan?

Austin, TX |

I have received several calls from collection agencies over the last couple of days, saying that I will be charged with Fraudulent use of a check regarding payday loans that I took out and have not yet gotten paid off completely. The people I have spoken to in one breath say it is a civil matter, but then say I can be criminally prosecuted for "writing bad checks". One of these loans I believe I paid off, but I do not have any written proof that it is paid. The people calling me are from several states, none of which are the one that I live in (Texas). I have no problem paying debts, but do not have the money for it right now, and I am very afraid they are going to try to bring criminal charges against me for these collections. I just want to know the law regarding this.

Attorney Answers 4


  1. If you intended to defraud them when they gave you the money, and had no intention of paying the debt, it could result in a criminal charge. Depending on how long ago this was and what the facts are I doubt there could be a valid criminal charge and stating this is a violation of the law.

    Disclaimer: This answer does not constitute legal advice. I am admitted in the States of New York, New Jersey and Massachusetts only and make no attempt to opine on matters of law that are not relevant to those three States. This advice is based on general principles of law that may or may not relate to your specific situation. Facts and laws change and these possible changes will affect the advice provided here. Consult an attorney in your locale before you act on any of this advice. You should not rely on this advice alone and nothing in these communications creates an attorney client relationship.


  2. Threatening criminal charges for a civil debt? Seek local legal help immediately. You may have a claim against them. If the other party is a debt collector (not the original creditor), you sound like you have a claim for violation of the federal Fair Debt Collection Practices Act. If the other party is out of the country, they are blowing smoke and you cannot get at them.

    Mr. Goldstein is a Virginia-licensed attorney only. The information is not, nor is it intended to be, legal advice. You should consult an attorney for individual advice regarding your own situation. Answering this question does not in any way constitute legal representation. Contacting Mitchell Goldstein or the Goldstein Law Group does not constitute legal representation, nor is any information you provide protected by attorney-client privilege until otherwise advised.


  3. I had a similar case in Austin recently.

    My client was charged with issuance of a bad check (IBC). The charge was in justice of the peace court. It ended up being dismissed. The prosecutor usually won't dismiss until right before trial.


  4. If you gave them truthful and complete information at the time you got the loans, then you have done nothing that could result in criminal charges. The failure to pay as agreed is not criminal but it is a civil matter. I would tell them that you consider their calls and threats to be harassment which in Texas IS a crime, and that any communication with you on the matters must be in writing. Further, you want a full accounting of all loans and payments because they are fraudulently trying to get money on paid accounts.

    Although I have answered the question to try to help you, you should consult with a lawyer in your area in person on the matter. In addition, my answer does not establish an attorney-client relationship between us.

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