Can a collections attorney demand payment the day they call and threaten to file check fraud charges against me for not making a payment?

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Can a collections attorney demand payment the day they call and threaten to file check fraud charges against me for not making a payment?

An attorney called yesterday stating that a payday creditor of mine gave them my information for for a loan that I took out in the amount of $700. They are saying that I now owe $2000. If I don’t pay it, a fraud charge will be filed against me. She said if I give them at least something they will hold the judgment until I come up with the rest. I was told that legally I am supposed to pay the amount borrowed plus the principle. Not the legal fees, and such. Is this true? What do I do? And can they file check fraud against me?

Asked on January 28, 2011 under Bankruptcy Law, Michigan

Answers:

M.D., Member, California and New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

A person who has borrowed money cannot be threatened with criminal action for non-payment.  People don't go to jail for owing money.  Debtor's prison went out about the time Dickens.  The exception would be if you had committed a fraud of some sor in obtaining the money.  Then that would be a crime.  For example, if you scammed someone into lending money with no intention to repay.  Absent that - neither a debt collector or creditor may threaten you with imprisonment or even the possibility of criminal charges.  If they do you could actually sue them.  Additionally, they can not harass or otherwise intimidate, etc.  It's the law - the "Fair Debt Collections Practices Act" (FDCPA).  However, this doesn't mean that you don't owe the money.  In setting up a re-payment plan just be careful in just what information that you give them (especially banking information). 

Note:  You cannot be sued for debt that is "too old".  This is due to something called the "statute of limitations".  In MI you cannot typically be sued for most debt that is over 6 years old.


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