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Many people trying to repay payday loans are concerned that they will be sentenced to prison over an unpaid payday loan. In the vast majority of circumstances, however, you will not go to prison for failing to repay a debt.

But if you can’t pay back your payday loan, you might have to pay more fees, your credit might suffer, it might be more difficult for you to receive credit in the future, and you might even have to go to court in some circumstances.

Can I go to prison if I don’t pay back my payday loan?

The short answer is no. You cannot be sentenced to prison for not returning a loan, but lenders may take you to court in an effort to recoup their lost money.

This is true even for modest sums of money and only in cases where all previous approaches—including phone calls, emails, letters, and even bailiffs—have failed.

If you fail to show up to your court hearings you may risk jail time, so make sure you are not ignoring these letters.

Payday lenders typically make efforts to recover their money in ways that are advantageous to both parties. A lender may elect to go to court to obtain their funds if, for whatever reason, this cannot be done quickly.

If you don’t fight the lender’s claims, or if they win anyway, the court will issue a judgment order against you.

It is feasible for your payday lender to set up wage garnishment, which entails deducting a certain amount from your salary and sending it directly to the lender to cover the unpaid payday loan.

You cannot be arrested and sent to jail over an unpaid payday loan.

What happens if I don’t repay my payday loan?

The consequences are actually not serious if you accidentally miss a payment or are only a few days late. The following problems may arise if you don’t make your payday loan repayments on time:

The lender will contact you.

The lender will probably call you to check in on a missing payment, as is customary. Usually, this will begin with an email and a text message, but occasionally, a customer support representative will call you personally to follow up.

Late fines or daily interest will be charged.

You can be charged a late fee if you don’t make your planned repayment on time. This is a one-time cost, but it will be charged for any late collections.

For example, if your loan has a three-month term and you miss three payments, you could be charged once for each missed payment.

It will have a negative influence on your credit score.

Your credit score will suffer if you don’t make timely payments, and future lenders and credit card issuers will be able to view this information whenever you apply for services.

Your credit score is updated in real-time, serving as a warning to potential creditors who may be reviewing a recent loan or credit application.

Court Summons

A court summons will be sent to you if a payday lender wishes to file a lawsuit for your unpaid debt. On the summons, you can see your court dates as well as other crucial details about the court procedures.

Do not disregard a court order if you receive one. Make every effort to arrive for your court appearance in a timely manner and to abide by the rulings of the judge.

Wage Garnishment

A payday loan lender may, in some cases after a court judgement, be able to garnish your wages in order to recover the money they owe.

Wage garnishment is the practice of taking money straight from a borrower’s bank account, regardless of the account holder’s permission.

Wage garnishment can also cause other problems, such as a negative account balance or missing payments for additional payments and obligations.

What should I do if I can’t repay?

It can be perplexing and distressing to find yourself in a situation where you can’t repay a payday loan. But you can employ some simple methods to fight back out of this situation.

Borrowers who are unable to repay their payday loans must begin negotiations with your lender as soon as possible. Negotiating a repayment schedule before the lender attempts to collect is significantly easier.

Threats of bankruptcy could particularly affect payday lenders. Many unsecured debts become void after filing for bankruptcy. They couldn’t sell or collect on the account. Negotiation is still possible even if a debt-collecting agency holds the account. The worst thing somebody can say is no, and it never hurts.

It could be wise to seek legal representation if the lender has already filed a lawsuit. They can assist borrowers in dealing with the problem as effectively as feasible. Borrowers are still required to appear in court even if they cannot afford representation.

The longer you are unable to repay the debt, the worse your financial condition will get because interest will continue to mount during the loan duration. It would be best if you always tried to start paying back your loan within the given time frame so that interest charges don’t get out of hand quickly.