If you wrote a bad check, that's bank fraud and you can be arrested for that, not just sued. If you closed your bank account specifically to prevent them from collecting their debt, then that's fraud as well
You can be sued in civil court for defaulting on a loan - it happens every single day. If you go to court not only will you owe the full amount of the debt plus all accrued interest, but you will also have to pay the winning side's legal fees. Your wages will be garnished until the full amount is repaid
Did you make ANY attempt to renegotiate the payment terms of the loan when your circumstances changed? If not, that was your biggest mistake. You should have informed them BEFORE the loan was due about the change in circumstances to try and negotiate a revised repayment plan. You can't just not pay a loan for a year then expect it to disappear and not come back to bite you. Do you know what the compounded interest is on a payday loan? It can be 4000% APR
If you gave your friends as a reference on your loan application, then they can call them. Otherwise how would they know who your friends were to begin with?