Can I go to jail for not paying back a payday loan?

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Can I go to jail for not paying back a payday loan?

Asked on March 17, 2012 under Bankruptcy Law, California

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

The primary issue is, what was your intent when you took out the loan? Falling on hard times and being unable to repay is not a crime--if it was, for example, all the homeowners who've defaulted on mortgages would be in jail. Criminal liabilty depends on there being not merely an arguably criminal act (such as keeping another's money), but also criminal intention, or "mens rea." So, for example, if when you took the loan, you did not intend to repay it, or knew that you most likely could not repay it, that could support criminal liability. On the other hand, if you took the loan in good faith and then simply became unable to pay, that is not a crime (though you could still be sued for the money).


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