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Payday Loan Statute Of Limitations In Illinois

Payday loan statute of limitations in Illinois is the same is applicable for any other types of debts in this state, but there are some specific restrictions regarding debt collection that apply to payday lenders only. Besides that, people who have borrowed military payday loans get extra level of protraction from the state laws. When you borrow a payday cash advance, you promise to repay it on the next pay day, when you get your monthly salary credited to your checking bank account. In general, you have to submit a post dated check with the lender; the lender sends this check for collection on the set due date. If you do not have sufficient fund in your account, the check is bounced and lenders charge hefty amount of penalty charges. Similar thing happens when you authorize your lender from direct debit from your bank account and the electronic debit request by the lender fails because of non-sufficient fund in your account. The state of Illinois has specific legal provisions on how the lenders can collect the payday debts once a borrower misses the due date. Fortunately, the laws have been designed in a way that favors borrowers, but unfortunately, not many people are aware of the same. Following is a brief rundown on some of the important aspects associated with the Illinois payday loan statute of limitations.

Payday Debts In Illinois Are Valid For Ten Years

As per the laws regarding payday loan statute of limitations in Illinois, you cannot be held liable for the repayment of those payday loan accounts that are older than ten years. But, here it is very important for you to understand that the statute of limitations is calculated from the date when the last payment was made toward the loan account. It means if you borrowed a loan seven years back but have made certain amount of payment toward it just six months back, the statute of limitations will expire after nine years and six months.


Illinois payday loan laws do not consider nonpayment on a payday loan account as a criminal offence. Payday lenders are legally prohibited to place any criminal charges against you. They cannot file a lawsuit against you under the criminal law, not even under bounced check law. Though check bouncing is generally considered as a criminal offence, the bounced check laws do not apply to those checks that are issued to payday lenders as security against payday cash advances. But, lenders have the right to file a civil lawsuit against you. If they do so and win the case and get a judgment, they will have twenty more years (from the date when the court order is issued) to collect the loan (the judgment amount). It means, in this case, the payday loan statute of limitations in Illinois will be reset to twenty years.

Moving To Another State

Another situation that resets the statute of limitations for payday loan debts is when you move to another state for a few years after borrowing a payday loan in Illinois. Even if you come back after ten years, the lenders have the right to sue you. The statute of limitations in this case will be calculated from the date of your return to Illinois.

Restrictions On Collection Practices – Mandatory Repayment Plan

It is also very important for you to keep in mind that even the civil lawsuit can be filed by your lender only if the loan is at least twenty-eight days past due. At the same time, the Illinois payday loan laws also provides the right to the borrower to request for an affordable repayment plan (in easy installments over a certain period of time) after thirty five days from the due date and it is legally mandatory for the lenders to honor such request. The lenders can refuse to accept the repayment proposal presented by the borrower, but they must offer a counter proposal.

Sending Check For Collections And Charging NSF (Non-Sufficient Fund) Fee

Last, but not the least, you must also note that the laws regarding payday loan statute of limitations in Illinois allow lenders to submit a check issued by the borrower for collections for a maximum of two times only, but they can charge only one time NSF fee up to $25 only.

Military Payday Loans

If you are a member of military and have a military payday loan outstanding in your name, you must be well aware of the specific collection restrictions that apply to your lenders under the Illinois payday loan laws. To start with, your lenders are legally prohibited from contacting your commanding officer regarding the debt. If they do so, it will be considered as a criminal offence and you can file a court against them. Besides that, if you are a service member and are serving in a combat area, lenders are prohibited from continuing their collection efforts. What is more, even if a lender files a civil lawsuit against you, the court judgment will never include garnishment of your wages (which is a strong possibility in cases of general public).

Overall, as you can see, the awareness about the laws regarding payday loan statute of limitations in Illinois is very important. The more informed you are about the legal provisions and your rights, the better you will be able to protect yourself from illegal and unfair practices by payday loan lenders.

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