September 20, 2017

Pay Day Loan Lenders and Threats of Criminal Prosecution for Hot Checks

Pay day loan lenders are often the most aggressive about collecting.  I routinely hear about pay day loan lenders violating debt collection laws.  They commonly ask you to make out postdated checks for them when you borrow the money.  Then, when they deposit those checks later, if one bounces, they call and threaten to report you to the police for writing a hot check.  Sometimes, they even say “You could go to jail for writing that hot check.”  This is not true.  You can’t be convicted of a crime without having some level of intent (i.e. a state of mind involving some level of desire or wilful disregard towards commission of the crime).  Writing a post-dated check is not a crime.  And having less money in the future than you expected is also not a crime.

These threats by debt collectors are illegal.  It is illegal to threaten criminal prosecution to collect a debt, especially when no crime has been committed!  If you have a writing or recording of these threats, you should visit with an attorney about the possibility of filing a lawsuit against the debt collector for illegal debt collection practices under the Federal Debt Collection Practices Act (which applies in all states) or the Texas Debt Collection Practices Act (which applies only in Texas).

Everything I have stated above, and everything I write on this blog, assumes that the acts took place in Texas and Texas law applies. I can’t say for certain, but I would imagine that other states are more or less the same with regard to their hot check writing laws.  After all, it would violate common sense, basic human decency, and the United States Constitution to imprison someone who had no level of intent towards commission of a crime.  Check with your local bankruptcy lawyer.

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