Fast Cash: How Taking Out a Payday Loan Could Land You in Jail

He is calling me from a texas cell phone number but claims the law firm he works for is Goldstein and Barone in New York. Most Recent in Poetry: I know im not guilty but he is claiming they have evidence and wont let me see the evidence or even tell me what the proof is. They also tell me the paperwork has been filed in the county I live in a I would be served. However, as a matter of general information, such calls are typically scams or prohibited collection practices. Yes, the creditor or debt collector can sue you.

Payday loan companies have a new debt-collection tool: Texas courts and prosecutors.


 · The payday loan company can pursue the debt you own them and get a judgment against you. You could also have further liability for the bad check. Try to work something out with the company, like making  · If they do sue you, call me or another consumer protection lawyer; you can find one here: (I add that PA's republican legislature, heavily lobbied by the payday loan industry, is trying to make these % + interest rates  · in California a payday loan company can sue you for repayment on a loan default. However under the law payday loan companies are only limited to recover for the actual loan amount plus a $ service fee, but cannot sue to recover three times the amount of the check (considered as punitive damages)


Bank withdrawals and collection calls

One man and woman who live at the same address in rural Woodward County have been sued a total of 21 times. Attempts by ProPublica to reach them were unsuccessful. All but two of those suits were brought by subsidiaries of a single company, Ponca Finance. Ponca, which has filed at least 5, suits in Oklahoma in the past five years, declined to comment.

Michael Matthews, a lawyer with Legal Aid Services of Oklahoma who works with clients in Woodward and other nearby rural counties, said he frequently sees people entangled in suits over delinquent high-cost loans. Wage garnishment can follow swiftly.

Not appearing can pose a further danger, he said. Lenders can require borrowers to attend a hearing where they must declare what assets they have that may be eligible for garnishment. This is not unique to Oklahoma. In , the St. Louis Post-Dispatch reported that a similar chain of events had landed some Missourians in jail. Last year, Illinois modified its laws to make such warrants rarer. In Oklahoma, the outsized presence of high-cost lenders like Ponca is most striking in rural counties.

Woodward County, for instance, has a population of about 20, High-cost lenders file about suits there every year, accounting for more than one-third of all collections suits filed in the county court. Since the beginning of , more than 1, different Woodward residents, more than 5 percent of the total population, have been sued at least once. Installment lenders like Ponca and Noble are responsible for the vast majority of suits by high-cost lenders in Oklahoma. State law allows annual interest rates on such loans to range above percent.

Not all installment lenders are equally aggressive, however. Some sued far less frequently than others, despite having dozens of locations in Oklahoma. Gentry, the Noble executive, rejected the idea that his company might be doing a poor job of making sure his customers could make their payments. His company has operated for more than 30 years, he said, and would not have survived with sloppy underwriting.

Mississippi laws prevent installment lenders from charging the triple-digit rates common in some other states, but Tower has ways of magnifying the cost of borrowing.

The company, for instance, packages expensive but nearly useless insurance with the loans and encourages its customers to renew their loans over and over — both common industry practice s.

Louisiana allows high-cost lenders to add court costs and legal fees to what borrowers owe if they win judgments on delinquent debts, on top of interest charges. Here are two examples:. Tower said in a statement that it only sues as a last resort.

For many borrowers, the cycle of debt ends with a lawsuit — and more profit for Tower. Tower commonly sues borrowers and obtains judgments that allow it to continue to charge more than 30 percent interest, court records show. In Hinds County, home to Jackson, the state capital, Tower has filed at least 3, suits since the beginning of , according to a ProPublica analysis.

According to Hinds County Court records, Tower often retains an attorney named John Tucker to represent it against delinquent borrowers. Tucker is an executive at Tower Loan, its vice president and general counsel.

Tucker need not appear in court to collect the fee. Tower Loan is seen on Dec. Tucker has, but who can also perform this service for less. Priester said that, while such practices concern him, there is little he can do: Missouri, for instance, restricts them to 15 percent of the delinquent amount. Oklahoma caps them at 10 percent in most cases. Tower, which has a total of locations across five states in the South and Midwest, also often sues its customers in Missouri.

Tower is owned by the publicly traded Prospect Capital Corp. Among those companies are Speedy Cash and two other high-cost lenders. Lewis, the former Tower employee, said he was struck by how routine filing suit against customers and seizing a portion of their wages can be. Get our stories by email. Please enable JavaScript to view the comments powered by Disqus. Comments powered by Disqus. Thank you for your interest in republishing this story.

You are are free republish it so long as you do the following:. High-cost lenders frequently sue their customers. Since the beginning of , high-cost lenders have filed more than 47, suits in Missouri and more than 95, suits in Oklahoma.

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Everything else there is accurate. Related Questions Has anyone had charges pressed againest them or been sued by a payday loan company? In the state of Kansas, can payday loans press charges against you for not paying back loan? Can a payday loan company sue me for writing bad checks? Payday loan company says suing my friend? Any advice are they for real?