Legal Question in Credit and Debt Law in Canada

Re: loan repayment of payday loan

We do not know what a "played loan" is. However it is not true that you can make an offer and if the ofer is refused the debt is cancelled. The debt is only ended when you pay the loan accoriding to the original contract. However suing you for $3,000 on a $380 loan seems impossible. It is likely the person who called and threatened is not really a lawyer, since no competent lawyer would make a threat that clearly is not possible. Call your better business bureau and government consumer protection office. They will have information as to the maximum amount of intedrest you can be required to pay and as to consumer protection programs alowing you to pay the proper debt according toa schedule the consumer protection office can set out.

Re: loan repayment of payday loan

A debt is a debt.

Even if you make an offer to repay a certain way, and the creditor refuses, this does not nullify a debt.

Under your debt contract, you were required to pay a certain amount at a certain period in time. If you did not pay as required, they have the ability to take certain steps to enforce their debt.

No one can take money out of your account without authorization from you.

As it was a payday loan, it is likely that you gave them authorization to debit your account, and they did so in accordance with your authorization.

Payday loans are notorious for having interest rates which are contrary to section 347 of the Criminal Code of Canada. This means any loan with an annual interest rate of over 59.9% is a criminal interest rate.

There are many court cases in Canada in which a person gets sued for failure to pay a payday loan. The payday loan company tries to collect large amounts of interest along with the original loan from the individual. In those cases, the judge will require the person being sued to repay the payday loan amount borrowed; however, the judge will not require the illegal interest amounts to be paid.

I would suggest making an offer to pay the principal amount borrowed. If they refuse this, it may be worth you while to allow them to sue you and to make your case in front of a judge that they are charging a criminal interest rate as a defence.

If your income is low, you may want to consider looking into legal/law student clinics in your area to help you with this matter.

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