What Happens If You Do Not Pay Back Payday Loans in Florida?

Payday loans are only issued for a relatively short period of time -- generally, the loans must be paid back within a month -- but lenders usually charge a high rate of interest. In addition to these high interest rates, Florida borrowers may face high fees, particularly in the event that they fail to pay the loans back on time.

Fees

A person in Florida who fails to pay back a payday loan can expect to get charged with fees in addition to those originally assessed on the loan. However, in Florida, a lender is only allowed to charge a maximum of 10 percent interest on the loan, plus a small verification fee. This 10 percent includes both the interest rate applied to the loan and any additional fees.

Rollovers

In many states, if a borrower fails to pay back a payday loan, the loan will simply roll over to the next month. This means that the original loan, plus accumulated fees and interest payments, will form the basis for a new loan, to which additional interest and fees will apply. Unchecked, this debt will continue to snowball. However, in Florida, rollover loans are illegal. Fees and interest can only be assessed on the original loan.

Creditor Actions

If a debt goes delinquent, the creditor may take a number of steps to secure payment of the outstanding debt. For example, the creditor may file a civil suit against the individual, seeking damages for breach of contract. If awarded, the creditor may pursue more aggressive tactics for collecting the money, such as attempting to garnish the individual's wages or freezing his bank account and seizing money out of it.

Criminal Charges

Generally, a payday loan borrower does not need to fear criminal charges, in Florida or in any other state. Although some unscrupulous lenders may threaten debtors with arrest and imprisonment, a debtor cannot go to jail in the United States merely for having an outstanding debt. In addition, although some states have so-called "hot check" laws, bouncing a check in Florida will not get a payday borrower charged with criminal fraud.