Can an internet payday lender garnish my wages?
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Can an internet payday lender garnish my wages?
I recently got in over my head with some payday loans. Paying them off however, continues to put me in a deeper hole. I read some place that since they are illegal in NY that I don’t need to pay them or that I only need to pay the amount that I borrowed? Which one is true, if any? What am I obligated to pay them back, if anything. Can they garnish my wages?
Asked on August 29, 2010 under Bankruptcy Law, New York
Answers:
MD, Member, California Bar / FreeAdvice Contributing Attorney
Answered 13 years ago | Contributor
The short answer is yes, any legal entity can garnish your wages once it obtains a judgment to do so or based on contract to automatically take out monies from your account on a regular basis. That being said, keep in mind that almost all states have agencies who regulate payday lenders (whether internet based or not). This means check with your state's attorney general and department of financial institutions or banking department to determine if that particular payday lender is licensed by your state. If your state licenses such entities and this company is not licensed, many states have laws that state that entity cannot keep any of the monies it took from you and you can keep all the monies you borrowed. File a complaint with the agencies I mentioned.
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