A payday advance provided by a private company is a form of payday loans. These loans are issued for only a short period of time, carry a high rate of interest and are typically secured by a bank account number of a post-dated check. When a person borrows money in this way, he is legally obligated to pay the debtor the principal of the payday loan, plus interest and fees. In Florida, lenders may eventually garnish a debtor's wages if he defaults.
Payday Advance
A borrower who takes out a payday loans signs a contract in which she agrees to pay back the money she owes according to the terms that have been set by the payday lender. This money constitutes an advance on income that the person expects to receive in the near future. Given that this debt is recorded on a written contract, the lender has grounds to sue for breach of contract in court and collect damages.
Lawsuits
In Florida, as in other states, a lender has the right to sue a borrower for failure to pay back the money owed according to a written contract, so long as it is before the statute of limitations expires. In Florida, the statute of limitations for filing suing on a debt owed from a written contract is five years. Only after a judge has awarded damages to the payday lender can the lender attempt to garnish the borrower's wages.
Garnishment
A lender is allowed to garnish a person's wages only if the judge grants him what in Florida is known as a "writ of garnishment." This writ will be presented to the borrower's employer and will mandate that the employer set aside a percentage of the borrower's paycheck and pass it on to the lender. A judge will typically grant this writ only if the borrower refuses to pay the damages after being ordered to do so.
Restrictions
In Florida, several types of people are exempt from garnishment. For example, unless the head of household makes more than $500 per week, she is exempt from garnishment. Similarly, anybody who makes less than 30 times the hourly minimum wage per week is exempt. If a person is not declared exempt from garnishment, the lender still can claim only a maximum of 25 percent of his paycheck.
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