sammy asked in Business & FinanceCredit · 1 decade ago

Pay Day Loan taken in Toronto, Canada - Can't pay back..need to know my legal options.?

I recently took out a pay day loan here in toronto,canada.I cannot pay it back now.Need to know what my options are as i cannot pay it back.Will my wage be garnished by my employer.if so then i think there needs to be a court order before they do that..also can they legally call my employer as i do not wnat them to know about it...my loan is only for 700 dollars...what can i do..can i make payment arrangements with them as i cannot pay in one go...please help!!!! also can my employer fire for this..i don't think so but would need advise on it aswell.

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  • 1 decade ago
    Favorite Answer

    What happens, depends on where you took the loan from. Every company has a different approach to collecting they will range from calling you at home, work and any references you gave them. Some will even COME to your home or place of work to "visit"...seriously some come to your work.

    The best thing you can do is call them. They will probably still put your cheque threw though it will bounce. MAKE PAYMENT ARRANGEMENTS and do whatever you can to stick to them. Trust me they'll give you the run around a bit, try to "intimidate" you a little on the phone- don't worry about it, just make the arrangements (believe me, all they want is their money). Its better you call them FIRST before they start calling you (and everyone else) as long as you stick to your payment arrangements they will have no reason to call you or send/ hand deliver collection notices.

    You will probably have to pay NSF fees (both yours and theirs) also there will probably be interest (a sick amount!!) so be prepared. They can't garnish your wages without a court order, HOWEVER if you don't pay they will get one...and its costly TO you, because you signed a waiver stating that court costs will be your responsibility and I can assure you they are near $400.00 or more, so don't screw around.

    1. Call, let them know you can't pay

    2. Make arrangements and stick to them (100.00 every pay period for example)

    3. Never take a payday loan again (but you will)

    Good luck

    PS if you want to REALLY avoid bouncing the cheque, you could always (just this time!!) go in on payday, pay what you owe and then just take another loan...basically you give the money to them and they hand it right back... I strongly suggest against this approach though

    Source(s): I know a thing or two about this industry in Canada, more importantly Ontario
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  • Anonymous
    4 years ago

    Payday Loans Toronto

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  • Lacey
    Lv 5
    1 decade ago

    DON'T close an account connected to the loan, then you can be charged with fraud. Before the payback date comes up, and as soon as possible, go and talk to them and let them know that you need to work out a payment plan. The interest is probably higher than your credit cards, but it is better to pay it off than have an unpaid debt on your record in collections. Pay as much as you possibly can every week or month, depending on how often you get paid. This means: No more Starbucks or soda, brown bag lunch, no movies, no beer, no bars. And NEVER take one of these loans out again. I don't know what the laws are in Canada, but they will probably start calling you at work if they have to collect on it, and your boss can fire you for getting too many personal calls. Or, if they find out that you are defaulting on a loan and you work in a job handling cash, securities, or insurance, they can fire you (at least in most states in the US).

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  • 1 decade ago

    With a lot of the payday loans if you get in a bind and cannot pay then they allow you to "roll over" and do it again, of course this adds interest or fee to the already high interest or fee. After about 3 roll overs you can owe up to 75% interest on the original amount. If it is a "check advance" type loan and you wrote a post dated check and gave all your required id with it then you can be arrested for a hot check!!! That's how it works in many states, I am not certain about Canadian laws. If you are arrested for hot check someone that loves you a lot has to come down and post bond which is usually the amount of the check PLUS all court cost. Your best bet is to contact this company and see if you can work it out and when you do stay away from them. Sell blood, furniture, motorcyle, car, TV or stereo, just whatever it takes!! They prey on misfortune and it is hard to get free of them.

    Source(s): Had an friend in the army that got caught up in the never ending loop!
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    6 years ago

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  • vixxen
    Lv 5
    1 decade ago

    I dont know how Canada works, but I thought payday loans were connected to your bank account and the "payback" money would be taken out of your account according to your arrangement with them. The only way to avoid paying is to close your account and make arrangements with them outside your account. In the US, no garnishments can be made without an Order,which takes time. Contact the lender directly and see what arrangements can be made and NO you cannot be fired for this.

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