I live in NY and have internet payday loans that are in default I have received phone calls from companies representing these payday loan companies threatening to put warrants out for me I would like to know what these companies by law are allowed to do as far as collecting the money I owe and what I should do.
The quick answer is: NO. An overly aggressive collector should not be able to get a warrant for you, unless there is fraud involved. In fact, there is an entire federal law that the FTC (Federal Trade Commission) enforces, called the Fair Debt Collection Practices Act (FDCPA). Learn more about your rights by reading the Bills.com FDCPA page.
To stop harassment, an important consideration is that you have the obligation to request the collector to "cease and desist" future communication with you, and to tell them that if they continue their harassment that they are in violation of the FDCPA.
There are some states where FDCPA applies to the original creditor, but in every state the FDCPA applies to third party collection agencies.
We get this payday loan collection advice question quite regularly, and there is an active blog at Bills.com on Payday loans and collections.
As far as owing the debts, if you default on your payday loans, the lender can take the same action as any other unsecured creditor to enforce a defaulted debt. Generally, their collection efforts will start with telephone calls and dunning letters demanding that you pay the balance of the loan. As stated above, if the payday loan company refers your accounts to a collection agency, you can usually stop the telephone calls by sending a cease communication demand letter, commonly called a cease and desist notice, to the collection agency.
If the creditor or collection agency cannot coerce you to pay through standard collection tactics, such as threatening phone calls, the creditor may decide to file a lawsuit against you to obtain a judgment against you for the balance of the debt. If the lender sues and obtains a judgment against you, it can then take steps to enforce the judgment as allowed by your state law. The most common methods of enforcing a judgment are wage garnishment, bank account levies, and property liens. To find out what actions a creditor can take to enforce a judgment in your state, I encourage your visit the Bills.com Collection Laws page.
I can also point you to the Free Bills.com Financial Planning and Budget Guide, which can help you manage your finances and learn about budgeting and prudent financial management.
If you need debt help, Bills.com makes it easy to apply at Debt Relief Savings Quote.
Bills.com also offers more information on the Payday Loan Information page, and has answered reader questions about payday loans in California, Florida, Illinois, Massachusetts, Missouri, Texas, and Virginia.
If you do not repay a payday loan, the payday loan company has several legal remedies, including wage garnishment, levy, and lien. See the Bills.com resource Collections Advice to learn more about the rights of creditors and debtors.
I hope this information helps you Find. Learn. Save.