[davy69]

Hello can anyone tell me what the pay day loan law is in Pennsylvania for collection actions on a payday loan? I was notified by a collection agency that my pay day loan would be turned over to a lawyer for collection. If it would go to court what does the Pa laws allow to collect payment?

I had made attempts with the pay day loan company to settle the matter, and had not had any replies on accepting a payment schedule... If anyone could answer this question I would greatly appreciate it very much, or if you need more information I will be happy to give more.

[Fr_Chuck]

I woud assume you could not make the arranged payments as you agreed to in your contract.

After you are in default they do not have to accept any "settlement" some may allow payments that are large enough with a high interst rate, but others will prefer to get a judgement first so they can be sure to get their money.

What will they do, they will sue you in court for tha amount you owed, plus all late fees and interest that is allowed according to the contract. Then they will add legal fees and court fees.

Then they will win a judgement against you.
After that they may attach money in your checking account or garnish your pay.

If they made you write them payment checks ahead of time ( some do) and they bounce they can seek criminal charges also.

[ScottGem]

A payday loan is just like any other debt. If you default, they can sue, get a judgement, garnish your salary, attach your bank accounts.

[medic223]

The above two statements are correct except for the fact that in the state of PA, they can only garnish wages if it were a landlord/tenant case. They can still take your property and attach your bank accounts

[JudyKayTee]

The above two statements are correct except for the fact that in the state of PA, they can only garnish wages if it were a landlord/tenant case. They can still take your property and attach your bank accounts

The exception to the exception is the wording in the payday loan document - there CAN be a release allowing the creditor to be paid directly by the employer. It's not considered a garnishment and I've seen it written into documents. It's a loan payback or some such thing if the loan is less than the pay check.

It's been posted before but I can't find it.

I'm surprised that this didn't become an automatic Judgment, which is also posted frequently.

[ScottGem]

The above two statements are correct except for the fact that in the state of PA, they can only garnish wages if it were a landlord/tenant case. They can still take your property and attach your bank accounts

Can you cite the statute behind that? I wasn't aware that in PA garnishment were restricted to landlord/tenant disputes.

But, as Judy noted, the loan contract could include a realease allowing the lender to collect from the employer without court intervention.

[medic223]

42 Pa.C.S. § 8127


(a) GENERAL RULE AND EXCEPTIONS.-- The wages, salaries and commissions of individuals shall while in the hands of the employer be exempt from any attachment, execution or other process except upon an action or proceeding:


(1) Under 23 Pa.C.S. Pt. IV (relating to divorce).


(2) For support.


(3) For board for four weeks or less.


(3.1) For amounts awarded to a judgment creditor- landlord arising out of a residential lease upon which the court has rendered judgment which is final. However, the amount subject to attachment shall have deducted from it any security deposit held by the judgment creditor-landlord and forfeited by the judgment debtor-tenant under section 511.1 of the act of April 6, 1951 (P.L. 69, No. 20), known as The Landlord and Tenant Act of 1951, unless the security deposit has been applied to payment of rent due on the same premises for which the judgment for attachment has been entered. The judgment creditor-landlord shall have the burden of proving that such security deposit has been applied to payment of rent due on the premises herein described. The sum attached shall be no more than 10% of the net wages per pay period of the judgment debtor-tenant or a sum not to place the debtor's net income below the poverty income guidelines as provided annually by the Federal Office of Management and Budget, whichever is less. For the purposes of this paragraph, "net wages" shall mean all wages paid less only the following items:

(I) Federal, State and local income taxes.
(ii) F.I.C.A. payments and nonvoluntary retirement payments.
(iii) Union dues.
(iv) Health insurance premiums.



(3.2) In the case of wage attachment arising out of a residential lease, to implement the wage attachment, the judgment creditor- landlord shall comply with the Pennsylvania Rules of Civil Procedure and any applicable local rules. The judgment of the district justice, magistrate or any other court having jurisdiction over landlord and tenant matters or a judgment before the court of common pleas shall reflect that portion of the judgment which is for physical damages arising out of a residential lease.

[ScottGem]

42 Pa.C.S. § 8127

That was all that was necessary, thanks.