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Last updated on April 19th, 2023 at 04:40 pm

Yes, it is possible to go to court if you cannot repay your payday loan, but this is only as a last resort and if the lender has taken lots of other measures to try recover their repayments and have been unsuccessful.

What happens if you cannot pay back your loan is that you will usually be sent follow up emails, phone calls and letters from the lender – and they may offer some kind of arrangement with lower monthly payments or similar. But if they are struggling to even a cent from you or you are ignoring their communication, they could eventually summon you to court to physically meet you and try recover their debts.

Before taking out any type of payday loan, it’s important to make sure you fully understand its terms, and are confident that you can keep up with repayments. Ensuring this can help to avoid going to court over the matter.

What Happens If I Don’t Pay Back a Payday Loan?

Defaulting on your payday loan may lead to multiple actions. This includes a negative impact on your credit score, wage garnishment, lawsuits, and being called by debt collectors. While very rare, jail time has also been given for failure to repay money owed.

Following the agreed loan period, the lender may implement one or more of these actions in an attempt to obtain any unpaid funds. They may instigate automatic withdrawals from your bank account, which could result in bank fees for yourself. If this proves to be unsuccessful, they could set up wage garnishment. This would involve a portion of your wages being withheld and then sent directly to your lender. For the duration of time that your loan hasn’t been fully paid back, it will still be accrediting interest.


What Happens if I Have No Money and Can’t Repay My Payday Loan?

As soon as you realize you will be unable to meet a scheduled loan repayment, contact your lender. A lender will always try to reach an agreement that makes it possible for you to repay the loan. You may be able to arrange a payment schedule that would be more affordable.

It can be incredibly stressful when you find yourself unable to meet your loan repayments. You may become worried about how you will support yourself or your family financially. There are nonprofit credit counselors, bankruptcy attorneys, or legal aid centers that can help you find out more about your options and plan for a better and brighter financial future. In certain situations where you are unable to repay your loans, claiming bankruptcy may be a relevant possibility. Declaring bankruptcy should always be discussed with a professional.

Can I Be Taken to Court if I Can’t Repay My Payday Loan?

Yes, you can be taken to court if you fail to repay a payday loan. Lenders can usually sue to collect the money you fail to pay back to them.

If you don’t dispute the lender’s claim, or if they win regardless, a judgment or order will be entered against you by the court.

It’s important to only borrow what you can afford to repay. Before submitting requests for loans from payday lenders, it’s vital that you read the terms of the loan, and what will be expected of you as a borrower, before going ahead with a loan.

What Happens if I Am Summoned to Court Over a Payday Loan?


A lender will try to create an alternative payment arrangement that suits both of your needs. If a lender can find no alternative or you are uncooperative, they may take you to court. While this acts as a last resort, lenders will bring small and large cases alike to court to get the money they are owed. Don’t be surprised if your lender takes you to court over a relatively small amount of money.

If you are summoned to court, make sure that you show up! Never ignore the lawsuit and turn up in court when you have been asked to do so.

In many cases, lenders automatically win cases, because clients do not attend court. No matter your circumstances, it is always in your best interest to show up to a court date.

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