If a creditor is threatening you with arrest warrants, the creditor likely is violating both the state and federal laws. You can report the creditor's violation to the WA Attorney General at www.atg.wa.gov .
A creditor can sue you. Certain documents (such as the summons and complaint) must be served on you.
Your agreement with the creditor likely allows the winning party to ask the court to order the losing party to pay the winning party's attorney's fees and other costs. Attorney's fees can change a debt of a few hundred dollars into a debt of a few thousand dollars.
You likely should work with the creditor to avoid be sued.
If you have a lot of other debts, you may want to check with an attorney whether you are eligible for bankruptcy and whether filing for bankruptcy is a good option for you.
Based on what you have said, I do not believe you have violated any criminal laws so don't be concerned about an arrest warrant as the dispute appears civil and not criminal. I would do what you can to resolve the matter with the payday loan service. Otherwise, you are looking at additional fees and costs.
A creditor can file a civil lawsuit against you and serve you with a summons and complaint for the moneys owed. If they are threatening to have you arrested, they are flat out lying to you. The worst they can do, if you do not respond to the summons and complaint in a timely manner is obtain a default judgement against you and perhaps eventually garnish wages and/or a bank account. Threats of arrest is a violation of federal and state laws that could place their license in jeopardy. You may want to consider consulting with an attorney regarding your options, and perhaps to negotiate a settlement.
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