Sep 16, 2010
When you choose to borrow money from a payday lender, you make a promise that you are going to pay back the money you owe plus any applicable interest and fees.
Debt Goes to Collections
After the lending company's collection attempts have been made, they will sell your debt to a third party collection agency. It is important to note that when this happens the collection agency is now the legal owner of the debt and has full legal rights to collect on it provided they do not violate the Fair Debt Collection Practices Act (FDCPA).
Collection Company Begins Calling
Once a collection agency has taken ownership of the debt, they will begin attempts to collect on it.
Lawsuit is Filed
If the collection agency has decided you are not willing to pay them they have the right to file a lawsuit. When this happens, you will receive a summons to appear in court.
Wage Garnishment
When your wages are garnished money is automatically taken from your paycheck and used to pay on the debt you owe.
Don't Ignore the Problem
Making contact with your payday lender and knowing your rights under the FDCPA is a much wiser course of action than simply trying to ignore your debt issues.
Source:
Privacy Rights: Debt Collection Practices
Read more: What happens if you refuse to pay back a payday loan? | Answerbag http://www.answerbag.com/q_view/2036262#ixzz0zdmkaFaY