In early September I experienced a psychotic break out, which resulted in my confinement in an adult psychiatric facility for six days. I now have a diagnosis of major depressive disorder and impulse control disorder. (The hospitalization is the first time in my life this has occurred.) I am now on medication and in therapy. In the 2-3 weeks before my hospitalization I took out 8 payday loans. I literally do not remember taking 5 of them. The bank closed my account the week after I got out of the hospital due to the high number of ACH denials and resultant fees. The companies will not restructure my payments, are soon going to take me to court, and a few have threatened to have me arrested for fraud. I have been unable to make even initial payments to some of the companies. Would I be able to have the loans voided because of my mental state at the time I took the loans? I don't want to file bankruptcy -- I filed 7 years ago and have worked very hard to keep my finances straight, at least until my brain turned off. I am really scared I am going to be arrested.
1 Answer from Attorneys
You may be able to have the contracts voided due to your diminished mental capacity. But those attempts very seldom succeed. If you had a documented psychiatric episode, it is very unlikely you would be convicted off fraud, if you're even prosecuted, which seems unlikely. Before deciding what go do, you should consult directly with an attorney in your area. They can give advice specific to the facts of your situation.