In the case of quick loans, the statute of limitations is the period during which a lender can sue a borrower in default. The statute of limitations for a payday loan in California is four years. It's important to be aware of this if you're considering taking out a quick loan. Quick loans can be incredibly dangerous, as they can quickly turn into an unaffordable cycle of high-interest loans that you can't repay.
It's difficult to keep up with normal living expenses while also paying off a payday loan, so many borrowers find themselves taking out another loan to cover the cost of the first one. It's important to note that you cannot be arrested for not paying a payday loan. However, if you are sued or if a court ruling was handed down against you and you ignore a court order to appear, a judge can issue an arrest warrant against you. Many lenders that offer payday loans and installment loans to California residents are illegal.
If you have received one or more of these loans in the past or are thinking about getting one, you should contact the Department of Financial Protection and Innovation (DFPI). You may be entitled to a full refund of all money paid to the lender. Payday lenders cannot sue for triple damages, so if you reach an agreement with the lender, make sure it's in writing so that it can be discussed in the future if necessary. Filing for bankruptcy will stop all collection efforts by debt collectors and will void the unsecured payday loan.
If you can't pay the full amount of the loan but can raise part of it, you can try to negotiate a repayment plan with the lender. Alternatively, you can offer to repay a certain loan amount in exchange for forgiving the remaining amount. Payday lenders often don't consider whether you can repay the loan because they can only cash your check or access your checking account. If you need to apply for a quick loan, apply for emergency expenses only and make sure you can repay it without taking out another loan.
Make sure you understand how the loan will be repaid and how much it will ultimately cost before accepting any terms of the loan. It's important to remember that quick loans can be incredibly dangerous and should only be taken out as a last resort. Be sure to contact the DFPI if you have received one or more of these loans in the past or are thinking about getting one.
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