Payday Collections Advice

Payday Collections Advice

I would like to know what these Payday Collections companies by law are allowed to do as far as collecting the money I owe.

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 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 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.

Editor’s note

Comments on this page are closed. See Payday Loans to learn how to handle payday loan collections. See the payday loan resources for California, Florida, Illinois, Massachusetts, Missouri, New York, Texas, and Virginia to learn more about payday loan laws in those states.

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 Collection Laws page.

I can also point you to the Free 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, makes it easy to apply at Debt Relief Savings Quote. 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 resource Collections Advice to learn more about the rights of creditors and debtors.

I hope this information helps you Find. Learn. Save.




PPam h, Jun, 2011
I am getting threatening phone calls at work. Saying they are going to have me arrested because of a defaulted payday loan from the internet. Can this actually happen?
BBill Admin, Jun, 2011
Some collection agents rely on idle threats as a means to motivate delinquent borrowers to make a payment. Only a district attorney or a judge can issue an arrest warrant. Please reread the original answer above to learn more about your rights as a consumer.
CCynthia, Nov, 2010
I have been getting calls from a payday collection company but do not have any payday loans in default. I believe this is a company trying to scam me, what kind of action can I take to first make sure they do not have more information on me than they should and second get them to stop harassing me? At first they would not tell me the name of the company that the loan was with and when I asked for the phone number of the payday lender they told me they could not give me that information but that they could connect me directly. When I was connected they told me the name of the company and I asked for a website but when I check the name and the website it is not a lender, it is just a site that will connect you with lenders. What are my options? Thank you!!
BBill Admin, Nov, 2010
You are one of many to receive these obnoxious telephone calls. Just because a voice on the other end of the telephone claims you owe a debt does not make it so. Please see the resource Fake Debt Collector to learn how to handle these calls.
EEmily, Oct, 2010
Can criminal charges be filed if you live in oklahoma and default on an internet payday loan?
BBill, Oct, 2010
Was fraud involved? Did the borrower use false identification or make false statements in the loan application? Did the borrower sign the loan contract intending to never repay the loan? If the answers to these three questions is no, then I do not see a crime here, and my guess is that neither will a district attorney. Honest people with good intentions who cannot repay payday loans will not be charged with a crime. Unpaid payday loans are a matter for the civil courts in Oklahoma and all other states.
BBill, Aug, 2009
First, do not believe legal advice by collections agents. The information they provide is usually misleading or wrong, and is always self-serving. Second, read my answer to another reader about how to deal with aggressive payday loan collections agents. This answer, Payday Loan and the FDCPA, contains some information that's specific to Florida readers, but most of the information is relevant to readers across the country.
MMarvel, Aug, 2009
Can payday loan companies file charges for ach debits that are returned unpaid if i secure my checking account to stop drafted payments?