What will happen if I stop paying payday loans?

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What will happen if I stop paying payday loans?

Through bad planning and stupidity on my part I have 2 payday loans that I have been paying on for over a year. The interest alone on theses has kept me from being able to pay them off. Because of this my household bills are falling and have fallen behind. If I close my bank account, what legal ramifications might I expect?

Asked on July 21, 2012 under Bankruptcy Law, North Carolina

Answers:

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

Potentially under the laws of the state that you reside in, the pay day loan's interest may be in violation of your state's usury laws for charging too high of an interest rate. If so, then under the laws of many states the result is that you have an interest free loan. I suggest that you consult with an attorney that practices in the area of consumer law to assist you.

If you fail to make payments on these loans, there is a very good chance that a demand letter will  be sent to you seeking payment and if you fail to resume payments, a lawsuit could very well be filed against you.

 


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