Going to Jail for not Paying Same Day Cash Advance?
Although taking out a same day cash advance may look like a quick solution to a financial emergency, it often puts clinets deeper into debt. According to the Consumer Financial Protection Bureau (CFPB), 80% of clients end up having to rollover their payday loan or take another loan to cover the previous one. This means that only 20% of clients have the money to pay back their payday loans.
So, what to do if you find yourself among the 80% of borrowers who can’t cover their same day cash advance? What happens next? Will you face jail time?
Being put into prison for not making timely repayments
Take a look at 28 U.S. Code § 2007. According to this administrative act, the national government allows every state to decide on debt-related imprisonments. Currently, 41 states prohibit the jailing of an individual for not covering a debt. Other nice states have a different approach to this issue.
Although there are no laws to enable imprisonment for debt, it can hardly be possible that a person would face jail time when they fail to bring money for repayments and Guaranteed Approval Bad Credit Loans. The Wall Street Journal states that most court sentences don’t originate from the failure to pay the money back. They also come from the failure to appear in the court or for the ignorance of the court’s previous decison on the case.
The Consumer Financial Protection Bureau takes responsibility for the regulation of same day cash advances at the national level. It states that a borrower can’t be arrested for ignoring payment obligations. A court can only order prison time for criminal offenses in the US. A failure to repay debt can’t be viewed as a criminal act. Direct lenders can only take you to civil court, not criminal court.
In reality, fraud occurs when a person takes money from a lender with an intention to not pay it back. In addition to proving this in a court of law, the debt collector also has to prove that the borrower’s intention was real. The borrower usually doesn’t realize how much the interest and fees add to the final value of the same day cash advance. When the payment comes due, it’s more than they expected, making them unable to pay back the loan. You know what: it’s illegal for collectors to mention jail in the communication with the borrower.
The Federal Trade Commission mentions that “if you are sued by the lender and you decide to ignore a court order, you will most likely get a warrant for your arrest. Your jail time will be determined by your unwillingness to cooperate with the courts. To prevent such inconveniences, you should consider contacting negotiating everything with the selected lender. Alternatively, you can get a piece of advice from a credit advisor. This specialist will help you consolidate your debts, provide you with the best interest rates, and provide you with better repayment terms.
Should You Trust Horror Stories?
Debt collectors will get to the lower levels in order to take a payment out of a borrower. CNN Money mentioned some collection agencies that applied the scare tactics, such as threatening jail time and sending child protective services to the home.
According to the investigation conducted by CNBC, most borrowers tend to work different jobs and juggle childcare at the same time. When the borrower can’t go to the court hearing devoted to missed repayments, the debt collectors pursue an arrest warrant with ease.
Fortunately, the American Civil Liberties Union (ACLU) aims to eliminate prison time for individuals who have a borrowed sum of money. They are focused on revealing unjust practices of debt collectors and pleading with the courts to establish fair legislation.